The GBP to EUR exchange rate was lower in early trading on Thursday after data earlier in the week failed to spark the pair. The week saw German GDP data and IFO business climate figures against a backdrop of UK borrowing but traders didn’t see anything that wasn’t expected.
The GBP to EUR trades at 1.1575 and the 1.16 figure is still the key number for the rest of the week.
UK ministers feel the heat after Cummings testimony
Professor Susan Michie from UCL responded to the criticism of Dominic Cummings’ testimony by saying:
“As a scientist, spending a lot of my last year, along with many other colleagues, thinking about science, writing about science, providing scientific advice on top of our day jobs, it is quite depressing to think that all that work, and all the many reports that we’ve produced weren’t landing, and possibly weren’t being considered.”
She added: “I think one of the frustrations about having given scientific advice over this last year is that there isn’t feedback … whether it was rejected because it wasn’t thought to be good, or maybe there are other political priorities. One never really knows what the explanation is when the advice we give isn’t being implemented. And I think that’s a shame because I think it’s quite demoralising for scientists.”
Dominic Cummings has said that the UK Health Secretary should’ve been fired many times at the outset of the virus and the criticism brings political instability to the GBP v EUR pair.
UK should see a lending boost
An economist and Senior Fellow to the think tank The Centre for Brexit Policy, Catherine Mcbridge, has said that national banks could have more freedom to operate and lend money without the constraints of the European Union. She noted that the BoE capital requirements could be eased for banks that want to operate in the UK only. That would allow businesses to lend more to businesses and would boost the economy as it reopens from the government lockdowns.
Ms Mcbride said: “There is one thing that I know the Bank of England is currently looking at changing. The EU decided that all banks in Europe, no matter how small or how unlikely, have the technical ability to trade in another EU country or set up an operation there. Because of this the EU made it so they all have to comply with the Basel Capital Requirements for internationally active banks.”
The GBPEUR has no more economic data for the week and is struggling to hold the 1.1600 level as traders favour the euro. Sterling is seeing headwinds from the political drama and the Indian virus variant and currently doesn’t have the steam to test the 1.18 yearly highs set at the beginning of March.