The GBPEUR exchange rate was 0.10% higher on Monday with a quiet day on the data front but tomorrow will see UK employment data. The UK is now reopening but politicians are pushing back on the freedom with warnings of another virus wave.
The GBP to EUR trades at 1.1610 and is trying to secure the 1.1600 level ahead of tomorrow’s data.
AstraZeneca vaccine effective against Indian virus
The AstraZeneca vaccine is said to be 97% effective against the Indian variant of the coronavirus, recent studies have said.
Fears have been building that the recent strain would derail the UK’s reopening and UK Health Secretary Matt Hancock said that the “vast majority” of people carrying the virus in hotspots Bolton and Blackburn haven’t had the vaccine, despite being eligible.
A study found that out of 3,000 vaccinated healthcare workers in India with the AstraZeneca vaccine found that only 85 had reported symptoms of the virus and only two required hospital treatment.
The UK has moved closer to a full reopening with indoor bars and restaurants opening but scientists from SAGE have warned that the latest Indian outbreak could cancel the last push to reopening in the UK.
The UK has seen strong GDP growth figures and will now look to power ahead with the economy reopening and a boost to the hard-hit services sector.
UK faces “labour shortage”
UK employers are struggling to hire new staff as the lockdown lifts with workers moving abroad or finding new careers.
The Chartered Institute of Personnel and Development (CIPD) and the recruitment firm Adecco have said that employers plan to hire new workers at the quickest rate in almost eight years, spurred by a reopening in the reopening of the hospitality and retail sectors.
However, ahead of tomorrow’s employment numbers, the HR group said there had been a sharp decline in the numbers of European workers, which had fuelled the risk of labour shortages.
The government lockdowns have led to insecurity and unknown in the hospitality sector and many workers have been unable to sit tight through a year of lockdowns. The recent inflation figures have been rising due to shortages in commodities and the labour market is also flashing a warning of unbalanced supply and demand.
Tomorrow will also see the latest Q1 GDP figures for the Eurozone with a -0.6% loss expected for EU growth, compared to a -0.7% print last month. The European growth numbers are struggling to catch the UK growth trajectory. UK inflation is released on Wednesday and that could be another pressure figure fo the BoE with the market now turning its attention to prices and questioning the central bank narrative. The 2% inflation targets are fast becoming a reality before economies have even opened up.
The GBPEUR will now look for a move towards the 1.18 highs which were registered in early-April, with central bank narrative the 1.15 level will be support.