Sterling has strengthened again this morning, equalling its highest point of the past year. The driver has undoubtedly been the news that while Omicron infection rates are massive, hospitalisations are manageable so long as the population has a vaccination boost, which in the UK most adults have.
Moreover, while business has continued, those most at risk appear to be protecting themselves, with retail, hospitality and entertainment venues open, but quiet.
Much will depend on whether the return of schools today causes the more vulnerable elements of society to be infected, increasing the call for further lockdown measures.
There are also fears over new Brexit trade restrictions that come into effect in 2022 and could disrupt supply lines that are only just recovering from the disruption of 2021.
While yesterday saw a slew of data releases across the eurozone there was nothing from the UK, it being a Bank Holiday. Later today we’ll hear data on consumer credit and mortgage lending, as well as a final reading for Manufacturing PMI.
The rest of the week continues fairly sluggishly for data, with new car sales and services and composite PMI on Thursday, then house prices on Friday from the Halifax.
