The GBPEUR exchange rate was trading lower by 0.20% on Tuesday as ministers start to bumble their way towards the planned reopening. The EU ban threats on the AstraZeneca vaccine have added to mixed messages about the economy’s move to reopening.
GBPEUR trades at 1.1585 after the UK saw its employment rate dip to 5%, but the figures are being masked by furlough.
With the UK boasting about the amount of vaccines it has administered in recent weeks, the economy should be getting ready to reopen further in April and June, with citizens regaining their freedoms and Boris Johnson delivering on his promise that the country would see an end to crippling restrictions ‘once and for all’.
The reality is a bit different with the EU and UK caught up in a spat over exports of the vaccine, while health officials and government ministers sour the national mood once again.
On Thursday ministers will vote on a bill that gives police extra powers to shut down protests as the public gets increasingly frustrated at the flip-flopping by government. Boris Johnson spoke on Monday about a third wave “washing upon our shores,” while a Professor from SAGE has warned against taking foreign holidays this year over fears of importing the virus.
The latest warnings may be an attempt to consumers at home and spending big on domestic holidays, but the government are not really delivering a wave of excitement to the public as many line up to take vaccinations that were previously said to be in the high 90s for efficacy, while a study this week said it was 79%.
The EU export ban on AstraZeneca vaccines would slow the UK plan “by two months” we were told, which would delay the UK reopening to the start of the flu season in September if Boris attempts to backtrack on his freedom promise.
Inflation Reading Should Drive the Pound this Week
Tomorrow sees the UK releasing its latest inflation reading for February in a market where inflation is the key talking point. A rise in US 10-yr yields had investors fretting over government borrowing costs, but central banks were more relaxed and said the rise was temporary.
Despite this, the ECB has delivered on its promise to increase bond buying with the bank showing purchases of €21.1 billion, up from €14 billion in the previous week. We said in one of our updates ahead of the ECB meeting that they would instigate a small increase in purchases as a signal to traders that they were ready to take action.
The European nations are still scarred from the Greek crisis when yields on the country’s debt exploded higher and, with debt levels soaring across the bloc, the ECB will want to contain any risks.
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