Following the Bank of England’s second emergency cut to interest rates and a new batch of quantitative easing, the pound strengthened against the euro and dollar at the end of last week. As the markets were expecting the measures and considered the Bank’s actions to be credible, sterling rebounded as a result.
Sterling is still trying to rebound this morning, however, is still weak when compared to recent levels. It’s likely that the markets will now begin to digest the governments new fiscal support measures, which include a commitment to pay companies 80% of staff wages up to £2500.
The markets also started to stabilise at the end of last week, causing safe haven currencies, such as the US dollar, to weaken.
On Friday afternoon, Boris Johnson announced that all pubs, restaurants, cinemas and similar venues will close.
This week, the Bank of England will hold their official meeting and any decisions will be announced on Thursday. As the interest rate now stands at 0.1%, it’s thought unlikely that the Bank will cut rates again. They announced towards the end of last week that they will abandon their stress tests this year.
It will also be a busy week for UK data, with inflation rate data on Wednesday and retail sales figures on Thursday.
