Sterling regained all of last week’s losses yesterday against the euro, strengthening close its highest point for a month.
There was some recovery against the US dollar too, but it remains nearly two cents weaker than last Tuesday.
The main reasons for the recovery are an upgrade of Britain’s GDP estimate for the second quarter of the year from 4.8% to 5.4%. This led the markets to believe that the Bank of England will raise interest rates earlier, especially if it sees evidence of employment and economic activity returning to pre-pandemic levels.
Speaking of which, clearer evidence is starting to emerge of a slow but sustained drop in Covid-19 cases in the UK (although less pronounced than in leading eurozone nations).
In the business news, in the UK new car registrations appear to have fallen severely in September, to the lowest level for 20 years. US oil has reached a 7-year price high. The problems of Chinese property empire Evergrande intensified after a developer defaulted on a $206m payment.
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