The GBPEUR exchange rate is 0.06% higher on Friday as the pair remains largely flat. European markets are quiet ahead of the US Non-Farm Payroll jobs number and the fact that there is no other economic data out for the day. Yesterday saw another new high for 2021 in the Pound v Euro after German retail sales came in lower than expected and UK manufacturing outperformed the European countries.
GBPEUR is trading at 1.1750 and the pair will likely end up near this level going into the weekend unless there is a headline to spur additional volumes.
German Retail Sales Signal Services Sector Woes
The UK economy should get a boost from medium-sized enterprise hiring, according to a new report.
BDO said it expects firms with a £10 million to £300m turnover to drive the country’s rebound from its worst performance in 300 years. The accounting and advisory ran a survey of leaders 500 of the businesses who meet the revenue criteria in order to find out their strategies for the months ahead.
The survey results saw that 75 % say that 2021 is the time to invest, and more than 25% have already planned investments in new deals or locations. Another three quarters of businesses expect to return to pre-virus levels within a year of the reopening, with 86% looking to add staff over the six months.
The UK GDP saw upward revisions to its GDP numbers this week for the third and fourth quarters and the economy is ready to see a strong bounce if Boris Johnson can execute his roadmap efficiently.
UK Should Avoid a Third Wave
The UK is unlikely to see a third virus wave like the one that’s shutting down France and other parts of Europe. Linda Bauld, professor of public health at the University of Edinburgh, said in an interview with Times Radio:
“I think we are in a very different position for two main reasons – the first one is that they are dealing with the B117 [variant] which unfortunately we exported to them and caused us huge challenges – still does – but much more in the winter. More importantly, 11.6% of citizens in the EU on average have been given their first dose of the vaccine – that’s all people, not just all adults – compared to over 40% of people in the UK, so you can see they are in a different place than we are.”
Analysts have maybe given the European economy the benefit of the doubt in their projections and it wouldn’t be a surprise to see the bloc miss its targets for an economic rebound.
The GBPEUR will take a pause here but, the momentum is clearly with sterling, whilst the euro is finding it hard to see any positive news releases. France is now in a month-long lockdown and that will damage the 5% growth expectations that the OCED had predicted for them in 2021.
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