The House of Representatives should today conclude the Donald Trump impeachment inquiry. The House Committee of Judiciary on Friday, 13 December passed two articles of impeachment covering abuse of power and obstruction of Congress in relation to the Ukraine scandal.
Trump is accused of abusing power by “corruptly” soliciting Ukraine to launch investigations into Joe Biden, the former vice president and political rival, while withholding $400 million in military aid. The obstruction of Congress article states that the US president directed White House employees not to comply with impeachment inquiry subpoenas.
Today’s vote is likely to pass as only requires a simple majority in the Democrats-held House of Representatives. The case will then move to Senate early next year.
Markets and data
Sterling yesterday, 17 December gave up all its post-election gains as fears of a no-deal Brexit resurfaced.
Boris Johnson is looking to propose a radically altered withdrawal agreement that will prevent Parliament from extending the transition period beyond 31 December 2020. Michael Gove defended the move saying that “deadlines concentrate minds”. Meanwhile, investors fear that if the departure date gets put into law and there is no trade agreement with the European Union in place, a no-deal Brexit will become more likely.
Not just politics
Outside of UK politics, there is plenty of economic data to release before the festive break:
Wednesday, 18 December: 09:30 (GMT) – UK Consumer Price Index (CPI) for November (y/y) – Previous: 1.5%; Forecast: 1.5%
Despite Sterling direction being driven predominantly by the election outcome, CPI could make an impact too.
Businesses and consumers have been holding off making major decisions amid election campaigning, which could have hit inflation. Any downward diversion from the forecast could weaken the Pound, as inflation remains nowhere near the Bank of England’s (BoE) 2 per cent target rate . With other central banks cutting rates and winding up their stimulus efforts, the Old Lady of Threadneedle Street could be forced to intervene.
Thursday, 19 December: 12:00 – BoE interest rate decision – Previous: 0.75%; Forecast: 0.75%
While the BoE is unlikely to change its base interest rate so soon after the election and so close to the Brexit deadline, the number of those in favour of a cut could increase as economic growth and inflationary pressure have plateaued. If the case for a rate reduction grows, Sterling will come under more pressure. Last time two of the nine Monetary Policy Committee (MPC) members voted for a cut.
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