The pound has hit a fresh 3-year high against the dollar this morning and is strong against the euro also. It is still benefitting from comments from Bank of England official Gertjan Vlieghe last week, who said that interest rates could rise earlier than expected if the economy picks up faster than the Bank of England (BoE) currently expects.
However, it’s thought that these gains will be limited as the markets await news of if the Indian variant of the COVID-19 virus will impact on plans to lift restrictions in the UK. Medical experts have warned that the UK could be on the brink of a third wave. The Prime Minister has said that the government will be assessing data from the past few weeks to make a decision on this by June 14.
This morning, manufacturing PMI data will be released, showing how the sector performed in May. Bank of England governor, Andrew Bailey, will also make a speech this afternoon. Services and composite PMI will be released on Thursday.
