Sterling rallied around lunchtime yesterday, briefly rising to the week’s high on news of a stock-market rally. The good news continued for the nation as a whole, as researchers in Oxford found a cheap and widely-available treatment, Dexamethasone, that cuts Covid-19 death rates by up to a third in the most seriously ill patients. This was not reflected in the price of sterling, however, which fell back.
Such is the impact of Brexit talks, which is putting a dampener on sterling’s fortunes. Could the UK-EU talks see a Dexamethasone-style breakthrough? The talk in recent days – with an extension to the transition period now apparently off the table – is that there is new momentum to talks and hopes of a deal in the autumn.
Earlier this morning we had the UK inflation figures in the Consumer Price Index. The most impactful index, year-on-year price rises, showed a 0.5% rise which was in line with expectations and had little effect on sterling. Tomorrow is a busier day, with the Bank of England Monetary Policy Committee (MPC) decision on interest rates.
The week will close out with GBP retail sales for May which are – obviously – expected to be disastrous, what with the shops almost all being shut.
