GBP: clearer skies ahead

GBP: clearer skies ahead

2022-08-30 • Updated

Virus status

Thanks to the rapid deployment of the vaccines, the virus dynamics in the UK are consistently improving. As the below charts show, the number of infections is dropping as does the mortality rate. At the moment, it’s the primary fundamental factor that lets observers assume the coming of economic recovery in the UK.

1.png

Source: https://coronavirus.data.gov.uk/

Labor market

In the meantime, unemployment appears to have passed the peak in December-January – that corresponds to the peak of infections in the same period. The number of employed people grew almost 70,000 in February giving reason to assume that the jobless rate will be less than 5% in that month. In general, companies are reported to take an upward curve as they are hiring more in expectation of the ending lockdown and improved humanitarian and, hence, economic environment.

2.png

Inflation

In the meantime, inflation eased to 0.4% in the UK. Analysts say it’s the result of the drop in the prices of clothes and leisure items that saw lower demand recently. However, observers comment that the stockpiles of cash accumulated over lockdowns and lower consumer activity may soon spur the economy as people are expected to spend more.  The Bank of England’s target is 2% for the first part of the year. The Chancellor of the Exchequer Rishi Sunak’s policy on continuing furlough payments to the UK citizens may help reach that objective on time.   

3.png

The pound

In recent months, the GBP gained significantly against the USD and the EUR. That is, despite all the Brexit hurdles and the worst economic crisis in the UK for the last 300 years. Optimism about the British economy suggests further strengthening of the pound beyond its current levels. However, another version is that as the global economy recovers with the USD and the EUR restoring their value, the pound will get back to its pre-virus levels: GBP/USD to the area of 1.30 and EUR/GBP to 0.90. The coming months will confirm – or disprove – if there will be signs of the trends that would correspond to this assumption. In any case, the economy is fundamentally on a clear recovery path in the UK. 

4.png

                                                                                              LOG IN

Similar

What Can Drive Oil below $90 a Barrel?
What Can Drive Oil below $90 a Barrel?

The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.

Latest news

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera