Bank of England Holds Rates as Economy Begins to Feel the Squeeze

Pound to Australian Dollar Exchange Rate Summary: GBPAUD Rises to Two Week Interbank Highs

The Bank of England left the base rate unchanged at 0.1% and their quantitative easing programme at £645bn, in line with market expectation although noted that it was prepared to increase its asset buying should financial conditions tighten, and its clear from economic data released this week, the UK economy is beginning to feel the squeeze.

Chancellor, Rishi Sunak confirmed that the self-employed will be able to claim up to 80% of their average monthly profits, worth up to £2,500 per month, although the scheme will not be available until June. The chancellor said that the package would cover 95 percent of self-employed workers and provided an “unprecedented level of support for self-employed people.”

UK Housing Market

UK Retail Sales contracted, and the housing market is grinding to a halt as banks struggle to value properties due to the lockdown. Many banks are granting extensions for mortgages already in process allowing customers time to complete although other lenders are suspending new mortgage applications all together.

Despite, the weak economic sentiment, the pound saw a rise of 0.4 percent on the day with GBPAUD interbank market once again trading above 2 dollars. The UK currency now sits nearly 2 percent higher against the Aussie dollar than 1 month ago although GBPAUD has seen approximately 7 percent between the highest and lowest points during that time.

Latest Australian Coronavirus Update

Latest data confirms Australia now has 2,799 confirmed coronavirus cases and 13 deaths. 178,000 tests have been conducted. Australian prime minister Scott Morrison has reacted quickly with a ¢189bn stimulus package although his communication to the nation has been criticised as many fail to take a clear message. Social venues along with many shops and services have been told to close their doors as the country begins to grind to a halt. People have been told only to travel if essential, and to maintain a safe distance from one and other. Morrison believes that by implementing measures much sooner than what other countries have done, the Aussies will be able to control the virus with less drastic and socially damaging actions although time will tell.

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