The Monday note - 6 November 2017

• The FTSE 100 rose 55 points last week to close at 7,560.4, as investors greeted the “very gradual” strategy announced by the Bank of England for raising interest rates. The ten year Gilt yield hardened to 1.27%.  
• The US economy saw 261,000 jobs created in October, as hiring picked up in the aftermath of September’s hurricanes. Unemployment fell to 4.1%, its lowest level since 2000. 
• The UK services sector PMI index rose to 55.6 in October, up from 53.6 in September, and the highest reading since April. The convention of the index is that a reading of over 50 suggests growth. 
• Ford has applied for a licence to offer an app-based ride hailing service in London. Ford’s Chariot business already operates in four US cities using mini-buses. 

Chief Economist comments: 

The UK government’s task of getting the necessary Brexit legislation through Parliament seemed vast even before they lost their majority. This morning’s newspapers report speculation that last week’s revelations could result in by-elections, which unpopular ruling parties often lose.

The idea of getting a hard Brexit through, other than the talks with the EU collapse, seem increasingly slim. With enough by-election defeats it is even possible that Brexit might be abandoned. Fairly soon, a soft Brexit could become the euro sceptics’ only face saving option.