By Ashley Finill
Coronavirus and UK economy
The Coronavirus continues to control the currency market and the pound looks to be benefiting slightly over the past couple of weeks as the UK’s cases are starting to fall. The 3rd wave of the virus hit the UK back in July with the number of cases soaring and bringing some sectors in the UK to their knees due to workers having to self-isolate, however cases are now dropping with the 3rd wave starting to pass. This may have given investors of the Pound some encouragement in buying into GBP as Sterling has risen around a cent on the Euro in the past week coming back to the highs seen back in early August. Given how fragile Sterling has been over the course of the pandemic it may be worth considering your options should you need Euros in the coming weeks. Over to the UK economy and all eyes will be on Wednesday of next week as the bank of England meet to discuss a potential interest rate increase as Inflation continues to rise. Over the past few days there has been growing speculation that a rate hike in the UK may be imminent. The Monetary policy committee will hold a vote on Wednesday and even if the rate is not changed it will provide some insight where members stand on a potential increase in the future.
The UK government is expected to provide a travel update today with reports suggesting a major change to the traffic light system. The green and amber lists will be merged into one category of low-risk nations and the number of places on the red list will be reduced, the report suggests. This could mean some positive changes regarding the popular tourist European countries with testing upon entry and return to the the UK. Currently Spain, Cyprus, Portugal, and France all remain in amber on the current system meaning those who have been double vaccinated are able to enter these countries showing their Covid passport but will have to take a lateral flow upon entering the country and take a day 2 PCR test when back in the UK. Earlier this week Savid Javid has spoken about his dislike for PCR tests when travelling to and from countries and is hoping to scrap the tests as early as possible, no official announcement is expected on this now, but further updates could follow with the travel update today. Should the tests be scrapped I am sure this will be music to our clients ears who are looking to view in Spain without the faff of testing and extra costs to their viewing trips.
This morning the UK released retail sales figures for August. The figure posted a -1.2% reading, up from last months figure of -2.4%, it was expected the to post a better figure and as a result Sterling has dropped off slightly this morning to start the days trading. Another Key data release this morning as Consumer Price Index is to be released in the Eurozone at 10am. This figure is expected to better than lasts months reading and should this be the case we may see further volatility in the market with Sterling likely to react negatively to the release. Keep in close contact with your account manager for friendly guidance on your currency transfer.