The pound continued its recovery against the US dollar yesterday to a three-month high – and steadiness against the euro – despite the news that primary schools in the UK will be largely closed until September and secondary schools may stay closed the following term too.
The issue isn’t just the loss of half a year’s education; it’s about the parents too. There are more than 10 million pupils in UK schools, over half of whom are at primary school and at an age where they cannot, legally, be left alone by their parents. Lockdown rules do not allow anyone else to care for them other than parents, even during the weekends or ‘holidays’. So that’s a lot of parents who won’t be heading back to work – or will be attempting to homeschool while also working from home – for another 12 weeks, at least.
One wonders how the rest of the Cabinet views our Education Secretary, given that the Chancellor Rishi Sunak has said that the closure of schools alone will cost the UK more than the 2008 financial crisis and threatens the ‘V-shaped’ economic recovery that he is depending on.
Amidst the gloom there was a very faint ray of sunshine from the housing market, which like others across Europe appears to be bouncing back as property viewings restart.
The other positive for the pound was that the Brexit talks are continuing to not fall apart.
There is a bigger concern for the pound, however. Given that school closures alone are likely to knock more off GDP this year than was ever predicted for a no-deal Brexit, is the government really scared about no-deal any more? Could the Brexit ultras in the Cabinet (and the special advisors) seek the opportunity to get the Brexit they really want?
In that circumstance we must once again contemplate the pound being at well below current rates against the euro by the summer. It is hard to overstate the many risks to the UK economy right now, and the knock-on effects for sterling.
To lock in today’s rate, speak to your trader on 020 8108 5337 and please do consider a forward contract if you plan to buy a home or move abroad in the next year.
At Smart we’re a strong supporter of local children’s charity Solidarity Sports. Our staff would normally be spending a day or two per year helping to entertain and organise activities for disadvantaged children. Of course we can’t do that right now, and these children are suffering inordinately in the lockdown.
So may I take the opportunity to ask anyone to donate a few quid to the charity’s lockdown appeal? Just your normal week’s coffee-shop budget would go a long way! Please donate here, if at all possible.
