The GBP AUD exchange rate surged last week as traders priced in higher interest rates for the UK economy. Higher rates will attract investors while Australia continues to hold rates at historic lows. There is no high-level economic data for the UK Or Australian economies this week and GBP strength could continue.
The GBP to AUD trades at 1.18575 as the trading week begins.
Australia to welcome 200,000 visa holders
The Australian government will open its borders to more than 200,000 visa holders to enter the country as part of its national reopening plan.
Restrictions will ease for students, economic migrants and refugees as part of the coalition’s efforts to boost skilled migration.
On Sunday, Australia reached a new vaccination milestone by surpassing their 85% double dose target. The new milestone means that international border restrictions will be eased further as the country moves towards a resumption of international travel.
Australia’s vaccine rollout got off to a slow start but is now said to have eclipsed the US and Britain. The problem for Australia is that European countries are moving back into lockdowns despite having high vaccine rates.
UK shoppers start Christmas shopping early
Shoppers in the UK have started their Christmas shopping early this year as sales at clothing outlets rose to pre-pandemic levels, with Black Friday purchases set to bring in another £9billion windfall.
The rush to start early helped to push overall sales volumes up in October by 0.8% – ending a five-month run of falling or flat volumes, according to the ONS.
The latest figures were above the predictions from a Reuters poll of economists which had suggested a 0.5% month-on-month increase. Last month’s sales drop of -0.2% was also revised higher to flat.
Experts said the early buying was ‘probably spurred by concerns about item availability and a desire not to miss out on the festive season’. The government had previously tried to soothe fears over Christmas shortages and that has the opposite effect as we saw with petrol panic buying.
Other analysts said there were ‘signs Christmas has come early for retailers’ with many shoppers concerned that gifts and toys could be in short supply this year.
A new report released by discount website VoucherCodes has predicted that shoppers will spend over £9 billion over the Black Friday weekend, when prices are heavily discounted online and on the high street.
Meanwhile, the Bank of England’s chief economist has cast doubt on the potential for a December rate hike. Huw Pill replaced Andy Haldane this summer and said there was a need to take action to get inflation back under control.
But he added that there was no guarantee that such a move would happen next month, adding: “I genuinely do not know today how I will vote.”
Speaking at an economics conference in Bristol on Saturday, Mr Pill admitted that he was “looking perhaps for reasons not to hike rates”.
But he warned that interest rate rises, when they do come, may be steeper than expected.
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