The GBP EUR exchange rate has been flirting with the 1.2000 level this week, which is the highs in the pair from 2020. Sterling has seen resistance at these price levels, but economic data this week could decide whether we see a breakout. The GDP figures later in the week could be the real catalyst as the economy is forecast to grow at 0.8% in the most recent quarter but could surprise.
The GBP to EUR was trading at 1.1975 on Tuesday and UK retail sales came in at 2.1%.
What’s in the Boris Johnson ‘living with covid plan?
The UK Prime Minister Boris Johnson is said to be drafting a strategy for the UK to ‘live with the virus,’ despite the UK reporting 142k cases.
Meanwhile, Tory rebels have said that they want isolation scrapped by March.
Former vaccines minister, Nadhim Zahawi, said: “It would certainly help mitigate some of the pressures on schools, on critical workforce and others”.
He also said that he hoped that the UK would be the first country to move to an “endemic” phase of the virus.
Other ideas for the country will be scaling back the free testing availability, but changes may not come before March.
The cost of providing lateral flow tests for free is said to be £6 billion, with a review set for April.
The PM’s spokesman Nicola Sturgeon was critical of the move and said it was, “hard to imagine much that would be less helpful to trying to ‘live with’ covid.
UK retail sales were 2.1% higher in December
The British Retail Consortium said that UK retail sales grew by 2.1% with full year growth coming in at 9.9%.
Paul Martin, UK head of retail for KPMG said the government restrictions slowed spending in the final weeks of 2021.
Food sales increased by 0.4% in the quarter, with non-food sales up by 4.8%.
Helen Dickinson, chief executive of the BRC, said:
“Despite the recent Omicron outbreak, retail sales held up through December”.
“Many people chose to shop online rather than travel to nearby high streets and shopping centres. Meanwhile, the return of work-from-home advice and reduction in Christmas social events caused formalwear sales to slow”.
In the face of rising case numbers and supply chain issues, people in retail pulled out all the stops to ensure everyone got what they wanted this Christmas”.
The UK economy will see the release of three-month GDP into November this week with expectations for growth of 0.8%. That is lower than last q-on-q figures of 0.9% but the UK was still set to outperform the G7.
A better-than-expected number would light a fire under sterling and propel the GBP v EUR above the 1.2000 resistance levels.
On Northern Ireland, the DUP has said that the UK must publish a timetable for any changes that are made to the protocol. The request came after the party’s leader held talks with foreign secretary Liz Truss.
Powered by Lumon