GBP EUR Finds Support Ahead of GDP Release

GBP EUR Exchange Rate: Weekly Review May 14th

The GBP EUR exchange rate was higher by 0.11% on Thursday as markets await the latest three-month GDP release from the UK economy. The pound sterling has hit a speed bump lately as interest rate bets were unwound and the government applied new restrictions over the virus variant. Germany will have inflation released but this is a final reading after previous estimates.

The GBP EUR was trading at 1.1640 and the bounce may be temporary with support at 1.1575.

UK plan b restrictions seen as ‘entirely pointless’ by experts

Politicians, scientists and business leaders lined up to slam Boris Johnson’s Plan B Covid measures yesterday, calling them ‘irrational’ and warning they won’t reduce cases in any meaningful way.

Experts fear the Government’s guidance on working from home and introduction of vaccine passports will do little to prevent the variant wave, which spooked ministers into pushing the panic button.

Tory John Redwood hit out at parts of the guidance that tell people to work from home if they can but also to take a lateral flow test for Christmas parties.

“It doesn’t make any sense,” Mr Redwood told the Telegraph. “It was quite clearly contradictory.”

Another Tory colleague Andrew Bridgen added: “For a government that claims to follow the science, I think they’ve lost their marbles. The restrictions are incoherent and irrational.”

There were also fears that the measures, which take effect from next week, will plunge the crippled hospitality industry into further despair. One reason for the staff shortages in the UK has been the constant shuttering of hospitality, which saw many temporary staff relocating to suburbs or going back to Europe.

The IEA said this week that the measures could wipe 2% from the UK GDP.

Russian invasion fears still looming for the euro

A Russian invasion of Ukraine would be on a scale “not seen in Europe since World War Two”, the new head of the armed forces has warned.

Admiral Sir Tony Radakin said it was “deeply worrying” to see an escalating crisis over Ukraine – where Russia has built-up of tens of thousands of troops on the border, almost eight years since the country reclaimed Crimea.

Ukraine’s foreign minister warned of economic and military consequences for Russia,saying:

“We – together with partners – we have to make this price unbearable for Putin.”

What Europe and its allies forget is that Russia could turn off the gas taps to Europe in retaliation and that would cause chaos after recent high gas prices. The euro is recovering against the pound sterling, but an escalation of this situation could reverse the trend.

British and US officials are unclear on President Vladimir Putin’s plans for Ukraine, but they believe one option would be a multi-front offensive early in the New Year, involving up to 175,000 military personnel. It is said that around half of that troop number is already assembled near the border.