The pound is still strong against both the euro and the dollar this morning after GDP data was released. As expected, the data shows that the UK economy has fallen into recession, shrinking 20.4% in the second quarter of this year and 21.7% year-on-year.
However, thankfully it’s not all doom and gloom – there was something positive to take away. A closer look at the data reveals that the economy bounced back in June by 8.7%, which beat forecasts of 8%. This a positive sign which suggests that the economy is now starting to make a recovery after the coronavirus crisis.
This GDP data follows unemployment figures released yesterday, which showed that the unemployment rate in the UK is lower than expected. This is good news and the pound was supported by this. However, the data doesn’t account for anyone who is currently on furlough. When the scheme ends in October, it’s thought that the rate of unemployment could rise significantly.
At the beginning of next week, talks between the UK and the EU resume. As we’ve said recently, Brexit remains a key driver for the pound. Despite some positive rhetoric surrounding the EU softening its stance, there’s no knowing how the talks will play out over the coming weeks and months. The timetable of negotiations finishes in October when it is hoped that an agreement will be made.
These Brexit talks could spell volatility for the pound. Before they begin, you may wish to speak to your trader about a forward contract, to ensure that your money is protected.
It’s also worth remembering that this is the first summer in a while that you will get any activity from French, Spanish, Italian and Portuguese property professionals (estate agents, lawyers, notaries etc), many of whom are not talking their usual August vacation.
If you wish to take advantage of this strange summer to secure your future, do call your trader on 020 8108 5337.
