By Ashley Finill
Boris Johnson hosted a press conference on Monday afternoon to confirm that from the 19th of July the government intends to go ahead with the final part of their roadmap on easing of restrictions against the Coronavirus in the UK. Dubbed as ‘Freedom Day’ easing restrictions will see social distancing and compulsory mask wearing in a public place and on transport removed, with a note of still remaining cautious and the public to make their own decision on how to stay safe throughout the remainder of the pandemic. This final easing of restrictions is seemingly the light at the end of the tunnel for what has been a tough 18 months for us all. There has been a somewhat mixed response to easing current measures due to cases rising in some areas of the UK but with 45.3 million adults (85%) having received one dose of the vaccine in the UK with the vaccine being offered to all adults by mid-July and 33 million having had the second, the government feel the successful vaccine rollout with deaths and hospital admissions also falling reliving pressure on the NHS justifies the rules being eased. Since news of the easing broke the markets have been somewhat stagnant with sterling making the slightest of gains on the Euro and Dollar in the past 48 hours. Investors may be cautious after Monday’s press conference as anything could happen from now until the 19th, once restrictions have officially been lifted then we may see some upside for sterling going forward.
Update on travel restrictions due later this week
In addition to easing restrictions in the UK there is hope for further good news in relation to travel restrictions with announcements coming from The Secretary of state for Transport for the UK Grant Shapps towards the end of this week. Reports are suggesting that certain rules may change for the countries in the amber section of the lighting system. The suggestion is that fully jabbed Brits will be able to travel to amber list countries without isolating upon arrival and return from a country in amber. Sajid Javid was also quoted to say that quarantine free holidays for double jabbed travellers would happen ‘very soon’. In support of this rumoured approach Germany announced on Monday that full vaccinated citizens of the UK are welcome in the country without having to quarantine. An announcement on which countries will remain on amber or move to green is expected to be made on the 15th of July with Grant Shapps giving a travel update on quarantine free travel towards the end of this week as mentioned.
Military clearance lifted in Spain
Some good news for people looking to buy in Spain this week, since the leaving the EU and UK citizens buying in some parts of Spain had to go through a time consuming process of being vetted by the military before the completion of a property had been finalised. This process has since been reviewed and now abolished. This is much welcomed news not just by our clients but also our trusted agents in Spain, making buying in Spain that bit easier. Many of our clients have also raised concerns on buying in Spain due to the 90 day rule, however with this rule of military clearance in Spain now taken away it may be a sign of things to come with the hope of a review and extension on the amount of time a resident outside of the EU can stay in the country creating more of an appetite amongst our keen buyers hoping to purchase their dream place in the sun.
Economic and Market Outlook
SocGen are predicting Sterling to be on course to test its highest levels since the EU referendum according to research. This is based on a bounce back from lockdowns in the UK with the public being able to spend their hard-earned cash which is likely to provide strength to sterling in the coming months seeing further upside in the GBP/EUR rates. Kit Juckes from Soc Gen said, “We’ve been wondering where the next factor to drive sterling will come from,” adding that a potential answer is UK growth outperformance relative to other countries. He notes UK growth expectations have been revised higher relative to the rest of the European G10 currencies, which could give it an edge. Whilst a picture had been sketched of doom and gloom for sterling in a post Brexit/coronavirus apocalyptic world the pound has held firm since the turn of the year, making steady gains on both the Dollar and the Euro. In the past 6 months Sterling has gained 6 cents on the Euro. To put that into monetary terms that is a saving of around £7k for a purchase of €150,000, which could collectively pay for your plane tickets, accommodation, and a reservation deposit with some left over, this I am sure is music to our clients’ ears who are eager to get on a plane and commence your property search.
A takeaway from the above is that Sterling is smashing the Euro(s) with a strong hope it continues, it’s coming home!