The GBPEUR exchange rate is slightly lower in early trading on Monday as traders await UK Prime Minister’s plan to reopen the economy in the coming weeks. Matt Hancock also confirmed the government’s updated target to offer a vaccine to all adults by the end of July.
GBP to EUR is trading above 1.1550 after the pound saw another week of gains.
How ‘cautious’ will Boris be?
Matt Hancock also stated that Prime Minister Boris Johnson would deliver a “cautious” roadmap for lifting England’s current lockdown on Monday, providing an “indicative sense” of how measures might be eased.
The statement will worry those expecting a fast reopening and Johnson was pouring cold water on hopes last week with his “data, not dates” statement. Traders have been driving the GBP to EUR exchange rate higher due to the fast rollout of the vaccine in the UK. If the PM goes slow on the reopening then it will be a wasted opportunity to gain ground on the world stage as one of the earliest economic rebounds.
The Bank of England have already projected a second quarter bounce but it wouldn’t be too surprising if Johnson were to make hard work of the reopening, despite the fact that all vulnerable age groups will likely have the second dose of the vaccine in March.
Matt Hancock also said on Sunday tv that the first dose, “reduces your impact of transmitting the disease by about two-thirds,” which would mean that even with a first shot the risk is 60% lower.
Trouble in the high street still looms
Delaying the economic reopening will continue to squeeze the high street and hospitality industry. News this week saw John Lewis considering another round of store closures, as the 156-year-old retailer struggles with empty streets. The company is said to be evaluating the scale of its UK branches, less than eight months after it closed eight stores to cope with the pandemic squeeze.
Another eight of its 42 remaining outlets could be shuttered, according to the Sunday Times reported, with the company considering downsizing into smaller units. The growth in e-commerce during the pandemic, alongside the continued struggles of retailers will surely put pressure on commercial real estate in the future and some cities could be ghost towns after the go-to strategy of governments and construction in the last decade has been to build larger shopping malls.
The GBP to EUR exchange rate will see German IFO business climate numbers this morning and this could add some movement ahead of the Johnson speech. The German economy has been strong in manufacturing and also confidence readings.