The GBPEUR was 0.25% higher on Monday with a quiet day in the economic calendar. The UK is being boosted by news that the country has vaccinated 23 million people, while stocks are boosted further.
The GBP to EUR is trading at 1.1675 and this week will see the latest Bank of England rate announcement on Thursday.
UK Aiming for Winter Vaccines Boost
The UK is targeting booster jabs for the coronavirus to be rolled out in ‘August or September’, according to a government official. Anthony Harnden, who is deputy chair of the Joint Committee on Vaccination and Immunisation (JCVI), said the boosters could keep cases under control in winter.
The country reported that more than 23m people have already received the first dose of a vaccine. This has put the UK on a path to reopening the economy and is seeing the pound to euro supported in currency markets.
The EU are considering a humiliating move to secure supplies of Moscow’s Sputnik V shot. The EU had previously dismissed Russia’s vaccine supply campaign as a propaganda stunt. After the bloc has seen its efforts stuttering, they are now looking to Russia after the latest concerns over AstraZeneca’s jab.
Britain’s schools went back last week and as long as they stay open, the pound should continue to gain.
BoE Set to Meet as Bank Sees ‘Light at End of Tunnel’
The Bank of England will announce their latest monetary policy measures this week with the bank likely to hold rates at current levels. The meeting may not bring anything news as Governor Bailey has remarked recently that he, “sees light at the end of the tunnel”.
Recent bond market selling has cooled, and the bank may adopt a “wait and see” approach to the country’s reopening. Bailey also saw working from home becoming more of a new normal, saying:
“Reduced travel time is a positive, but there may be lower innovation and creativity which would otherwise come from people being together more”.
He also suggested that the long-term scarring from the economy will not be as bad as previous economic recessions. The decision to extend the furlough program is seen as capping the unemployment rate.
Chief Economist at the bank, Andy Haldane, has been less cautious about his outlook by comparing the economy to a “coiled spring” which is ready to release large levels of “pent-up financial energy”. A big rise in household savings is one of the reasons for this outlook and if the reopening roadmap continues as planned then the public will get a chance to spend some of that savings.
The only question will be how frivolous people will become after another brush with financial crisis. It may be that the savings levels become more elevated over the longer-term.
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