The Monday note - 25 September 2017

• The FTSE 100 rose by 95 points last week to close on Friday at 7,310.6, as financial shares gained from talk of higher interest rates. Ten year Gilt yields stood at 1.36%. 
• The US Federal Reserve confirmed that it would begin reversing its QE purchases, largely by not replacing on its balance sheet some bonds when they reach maturity. 
• Online food delivery start-up, Deliveroo, has raised $350 million in funds from private sources, valuing the company at $2 billion. They plan to use the money to fund expansion. 
• UK Prime Minister, Theresa May, confirmed that the UK would seek a two transition period on leaving the EU. The UK would continue to pay into the bloc’s budget in exchange for continued access to the Single Market and the Customs Union. 

Chief Economist comments: 

On Friday, Theresa May made her opening offer on the Brexit bill, ready for Angela Merkel to review on returning to her desk this morning after the German election. The talks between David Davis and Michel Barnier have been a sideshow. With the French, UK and German elections out of the way, the three key heads of government will now begin the real negotiations. Note the two year transition period is looking a near certainty, and remember that six months ago it was considered controversial. The pendulum is moving towards a compromise.