The currency markets appeared to shrug off the widely-anticipated news that the UK’s remaining Covid-19 restrictions will not be lifted on 21 June as hoped, but will be extended to 19 July at least. Although sterling ended the day essentially unmoved, there may be longer term affects over the weeks ahead.
This morning there was broadly positive news on work in the UK, with unemployment claims falling by over 92,000 and average earnings rising by 5.6%, both better than expected.
Despite this, sterling has struggled against the euro this morning, while strengthening against the US and Australian dollars.
The continuing pandemic restrictions affect pubs, nightclubs and theatres in particular, with nightclubs remaining closed, theatres at 50% capacity and pubs with table service only. The red, green and amber system for international travel is unaffected.
However, several leading economists make it clear today that overall this will have a marginal effect on GDP and the economy is still set to rebound sharply. The FTSE hit its highest rate since February 2020 and oil prices their highest since April 2019.
Elsewhere, the UK is signing a trade deal with Australia today, the first to be more than an extension of previous EU deals.
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