The GBPEUR rate was trading at 1.17 at lunchtime on Friday after seeing weekly highs at 1.1716 yesterday. The pair is still struggling at this level and needs a burst higher to remove shorts or it could retreat.
UK government borrowing saw a record February as the pandemic splurge continues but the figure was smaller than analysts had expected.
Borrowing at February Record, Wetherspoons Sees a Loss
UK borrowing figures for February came in at a record due to the pandemic relief and furlough. But sterling was supported as the figures were slightly less bad than analysts had forecast.
The government borrowed £19bn in February, which was the highest figure since records began in 1993. Borrowing for the year to date has now hit £278.8bn, the ONS said, which is another record for that timeframe.
Elsewhere, consumer confidence figures GfK rose to -16 from -23 in February. Household expectations for the economy over the next 12 months have largely improved this month due to the reopening roadmap.
A GfK director said:
“The scores looking ahead one year are recovering especially well… If this improved mood translates into spending, it might help reverse some of the economic damage the UK has suffered,” adding that the latest numbers show, “…this may well happen. It’s highly likely this upward trajectory on all measures will build over the next six months and beyond.”
In company news Wetherspoons boss Tim Martin has called for an end to the “mayhem” lockdown strategy. Martin’s pub chain suffered losses of £68m for the half-year loss, while the company reported a 54% drop in revenues.
He appealed for “sensible policies” and pointed to the fact that there had been “very few outbreaks of the virus in pubs”. Governments slammed the hospitality sector with a heavy hand as they tried to stop non-essential forms of business from opening.
Europe Needs to Catch Up as US Vaccinates 100m
The latest delay in the European vaccination program this month has seen the country trailing the UK and US even further. A week-long halt on the AstraZeneca vaccine is now set to be reversed but the countries now need to move faster.
The International Monetary Fund has already said that the United States will return to the pre-crisis output levels by year-end, a whole six months ahead of the EU, but the EU is doing its best to extend that gap. This could have major repercussions for the euro currency and the GBPEUR exchange rate. The UK could see its businesses reopen in summer and consumers would be more keen to get out and celebrate in the warmer months, while Europe may have to skip the summer months before a full reopening.
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