The pound has weakened slightly against the euro and dollar but remains at strong levels against both.
GDP data released this morning revealed that the UK economy shrank by 9.9% last year as the country effectively shut down during periods of coronavirus restrictions. However, in the final quarter of 2020, the economy outperformed forecasts, growing by 1%. Bank of England chief economist Andy Haldane anticipates the economy will rebound as coronavirus restrictions are relaxed and people begin to spend once more, referring to the UK economy as a “coiled spring” with a lot of “pent-up financial energy” to release.
The UK’s vaccination programme continues to accelerate, with nearly 20% of the population having been vaccinated. The British Government is keen to get the economy moving before the summer, however, this depends on a decrease in infection rates and keeping new strains of the virus under control.
UK inflation rate data will be released on Wednesday next week and is expected to fall by 0.2 points to 0.4%.
