The pound ends the week better off than expected; an average of just 0.2% lower against the major currencies. On Thursday, it was briefly in the lead alongside the NOK and the NZD, though overall sterling seemed intent on obstructing its own path. The snags came with relentless regularity. First was Downing Street’s clumsy and short-lived attempt to evade its own self-isolation instruction. Then came Freedom Day and, with it, raising fears of an acceleration in infections.
On Wednesday, the government made a new set of demands for the EU to redraw the post-Brexit trading arrangements it agreed with the EU for Northern Ireland, amending them in Britain’s favour. The response from Brussels, however, was a flat rejection.
In more upbeat news, there was some positive UK economic data this week. Rightmove saw house prices 0.7% higher on the month and up by an annual 5.7%. UK public sector borrowing in June was just over £22 billion, higher on the month but less than expected. Monetary Policy Committee member Jonathan Haskel gave an optimistic speech, asserting that the UK economy might not be permanently scarred by the pandemic. He also said, however, that “for now, tight [monetary] policy is not the right policy”.
Today, many analysts have uttered predictions for further gains for the pound, particularly against the euro, as the rising Covid cases may be slowing.
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