The pound reached one-week highs against both the euro and the dollar yesterday, as optimism surrounding the effectiveness of lockdown measures increased. However, sterling is weaker this morning. As we have seen recently, it is moving with market sentiment, which has soured slightly. The pound also may have weakened due to the potential damage that the coronavirus crisis could inflict on the UK economy.
Yesterday afternoon, the UK’s independent tax and spending watchdog warned that the coronavirus pandemic could see the economy shrink by a record 35% by June. The International Monetary Fund also said that the UK could see the worst economic slump in a century.
Chancellor Rishi Sunak addressed the press in the daily briefing yesterday, stating that the latest death figures for the UK are a “powerful reminder” of the need for people to follow social distancing advice.
