The GBP to EUR exchange rate was flat ahead of today’s Bank of England interest rate announcement, while the government says the UK is “past the peak” in the virus.
Construction PMI figures came in lower than expected but GBPEUR traders are waiting for the central bank with the exchange rate trading at 1.1330.
UK Could See Normal Business by Summer Claim Advisors
The UK’s scientific advisor to the government Chris Whitty has Chris Whitty, has said that the UK could see a “significant return to normality” by summer. His comments came as it was noted that 10 million have now been vaccinated in the country.
The UK government is also funding a study to see if two different vaccines can be mixed for the recommended two doses. The so-called ‘vaccine cocktail’ could speed up the country’s plans to reopen the economy.
The Bank of England has already said they expect a bounce in the economy in the second quarter and this should be officially clarified in today’s quarterly outlook report. The central bank is expected to stay on hold at record low interest rates of 0.1% and traders will move the exchange rate on the bank’s expectations for further stimulus.
The UK government will announce its first budget in early-March, so the BoE will have this in mind for today’s announcement. The Australian RBA were expected to stay on hold with stimulus, but they doubled their existing support to A$200bn and nothing can be taken for granted in this climate.
Fishing Deal ‘Fell Short’ Say Ministers
The Brexit agreement signed by Boris Johnson fell short of expectations from the industry according to the government’s environment secretary.
George Eustice said to in a statement to a House of Lords committee that “it’s fair to say that we didn’t get everything that we wanted on fishing”.
The failure to secure a better deal on fishing could backfire on the PM with the SNP reviving their plans for a second referendum on Scottish independence. The irony is that Nicola Sturgeon would then seek to re-join the EU and would still lose on fishing. The SNP plans have been hit by a study from the London School of Economics, which claims that Scotland would see a four times bigger hit to the economy than it will through Brexit.
GBPEUR is trading at the 1.1330 level ahead of the BoE and this will determine whether sterling moves through the 1.1300 support, or whether it continues to see strength to the 1.1500 level. After stronger inflation numbers from the EU yesterday, another hint of stimulus would add fuel to a rebound in the euro currency. To find out how the Bank of England interest rate decision is likely to move the pound to euro exchange rate.
