The new rule on quarantining when you arrive in the UK from Spain raises more questions than answers, not least for sterling. Will it be positive or negative?
Looking at the most recent Covid infection graphs for Spain you can understand the British government’s point. But when you delve further into the data it’s hard to avoid getting into whataboutery.
What about the Balearics and Canary Islands? What about other countries, why aren’t they restricting Spanish arrivals? And so on.
The pound is in a similarly push-me-pull-you mode. Against the US dollar the pound is at a four-month high, and also doing well against the Singapore and Canadian dollars. Against the euro and several other currencies it has been weakening. It is even harder than usual to guess where the pound will go next. (Although do see what other financial institutions are forecasting for the quarter and year ahead in our newly published Quarterly Forecast.)
Does a robust attitude to quarantine – sacrificing much of the overseas tourist trade this summer – bode well for getting schools, business and the entertainment industry back for September, now only five weeks away? Will it rejuvenate the British catering industry in time for the Chancellor’s ‘Eat Out to Help Out’ scheme which comes into effect in August? Will it avoid a second spike here?
For those of us trying to get residency within the EU before the end of the transition period, things are getting critical.
The quarantine rules shouldn’t be too disastrous for those of us able to work from home, or for those looking for residency abroad. More worrying might be the volatility in the pound as we look towards a perfect storm of Brexit, recession and a potential second spike.
Speak to your trader on 020 8108 5337 about locking in today’s sterling rate with a forward contract.
