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British pound surges to 3 week high after UK court’s Brexit ruling

The British pound surged Thursday. (AP Photo/Alastair Grant, File).
The British pound surged Thursday. (AP Photo/Alastair Grant, File).

NEW YORK (Reuters) – Global equity prices, rattled by worries about the U.S. presidential election, steadied on Thursday after a UK court ruled that the British parliament must approve a government decision to trigger Brexit, lifting the pound to a three-week high.

U.S. Treasury prices slipped after the Bank of England scrapped plans to cut interest rates and projected higher inflation, while oil prices remained weak.

READ MORE: British government must get parliamentary approval to exit EU

“The market is having a bit of a rethink about the slide in the past few days, and the UK court decision this morning is also lifting equities a little bit,” said Michael Baughen, global investment specialist at JP Morgan Private Bank in Tampa.

The court decision, which will be appealed in early December, appeared to offer hope to investors who worry Prime Minister Theresa May’s cabinet is set on a “hard” exit from the EU. The sterling topped $1.24 for the first time in three weeks.

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British government ‘disappointed’ by judges’ decision on Brexit ruling – Nov 3, 2016

Tension in markets, rattled this week by a tightening race between the U.S. presidential candidates, eased a little after the UK court ruling.

“Any news that might indicate that Brexit is not necessarily a certainty or could be delayed is going to be positive for the pound and the markets in general,” said John De Clue, chief investment officer, The Private Client Reserve of U.S. Bank in Minneapolis.

READ MORE: The top 5 UK websites to shop as the British pound plunges

The Bank of England scrapped plans to cut interest rates and indicated that inflation is likely to rise further. It ramped up its forecasts for growth and predicted that inflation would jump to 2.7 percent this time next year, nearly triple its current level.

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[graphiq id=”ip8sYG1JGJ” title=”Pound sterling” width=”500″ height=”664″ url=”https://w.graphiq.com/w/ip8sYG1JGJ” link=”https://www.graphiq.com” link_text=”Visualization by Graphiq” ]