The GBPEUR exchange rate starts the week attempting to hold the 1.1700 level. The first two days of the week may be quiet with no economic data of note. Wednesday will see the latest flash PMI business activity data readings for the UK and Europe. Thursday will be the headline day with the latest BoE interest rate and monetary policy outlook.
The GBP to EUR trades at 1.1705 at the start of the week and is vulnerable after recent failures above that price.
UK posts fastest recovery rate in the developed economies
The UK economy has grown at the fastest rate in the developed world in the second quarter of 2021 according to the latest figures.
The data released by the Organisation for Economic Co-operation and Development (OECD) showed a positive improvement for the economy. Britain’s economy rose by 4.8% between April and June.
In contrast, China and the US posted growth that was less than half of the UK figures, with China’s economy rising by 1.3 percent, while the US rose by 1.6 percent. The OECD data also showed that the UK had the highest growing economy in the second quarter of 2021 of all G20 countries.
The UK’s performance has been attributed to the country’s fast rollout of vaccines that saw the economy jump-started once again. The high reliance on the services sector also played into this theme with pubs and restaurants reopening.
Last week saw strong employment data in the UK with jobs at pre-virus levels and vacancies at a record high. Alongside the higher inflation data, the BoE will feel some pressure to outline their strategy for removing stimulus.
Foreign takeovers ‘good news’ for the UK says Sunak
A record series of overseas private equity buyouts of UK-listed companies private is ‘good news’ for the economy, chancellor Rishi Sunak has claimed.
Speaking at a tech conference in London, the chancellor said interest in British businesses from overseas investors, including private equity companies, was positive for the economy, but said that regulators needed to check whether some takeovers were in Britain’s longer-term interest.
Britain has historically been relaxed about foreign takeovers but the purchase of chip design company ARM in 2016 by Japan’s SoftBank raised concerns, and regulators are currently discussing its sale to US company Nvidia Corp.
Asked if he would prefer to see ARM listed as an independent company in the UK, the chancellor said he could not comment specifically due to the ongoing regulatory process.
“Whether it is ARM or anyone else, I want to make (Britain) an incredibly attractive place for companies to raise capital,” Sunak said.
The GBP to EUR will likely consolidate this week until the Wednesday data unless there is some political headlines or virus-related issues. The latest shake up saw new measures to boost international travel, including abandoning expensive testing requirements for fully vaccinated travellers, whilst scrapping the confusing traffic light system and adding eight countries to the safe list.