Pound to euro exchange rate: GBP ‘struggles’ with all eyes on the UK economic recovery

The pound had a “rangebound” day against euro yesterday but managed to remain steady despite both currencies struggling at the beginning of the week. After a quiet few days, it seems unlikely that there will be a dramatic change in the exchange rate over the next few days. However, today data will be examined on how quickly the UK economy is looking to recover.

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The coronavirus pandemic is said to have devastated business sectors across the world, with many countries experiencing a dramatic drop in revenue.

The pound is currently trading at 1.1052 against the euro, according to Bloomberg at the time of writing.

This is just below yesterday’s trading rate which was 1.1055.

Despite the pound clawing back over that 1.11 handle, it’s struggling to hit that 1.12 handle.

Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.

He said: “Sterling held steady against the euro yesterday, with the pair remaining close to the bottom of the recent range, as both currencies struggled to get going as the week got underway.

“Today, the latest flash PMI surveys will be closely watched, with data on both sides of the Channel set to be examined for signs of how quickly the economic recovery is progressing.”

The UK economy shrank by a record 20.4 percent in April.

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This has unfortunately put the UK on course for the worst recession in more than three centuries.

The British economy is also set to shrink by a further eight percent this year and is unlikely to recover from the damage by the coronavirus until 2023.

Mark Gregory, EY UK’s chief economist, told The Guardian: “This is an undoubtedly challenging environment for businesses and forecasting is extremely difficult.

“We’ve made some significant adjustments to our GDP expectations compared to what the data told us just six weeks ago.”

It comes as the UK government borrowed a record £55billion in May to hold up the British economy in the wake of the coronavirus pandemic.

The UK’s debt is now officially bigger than the economy.

Debt levels are expected to continue to rise for the rest of the year as the UK recovers.

Ralph Hollister, a travel and tourism analyst at data and analytics company GlobalData said that the travel sector had been hit particularly hard financially by coronavirus.

He said: “Delayed reaction to slow the spread and buffer the economic impact of COVID-19, combined with current rules regarding social distancing and quarantining is significantly delaying the recovery of the UK travel sector.

“The UK now seems to be obstructing progress even further by opting out of an information-sharing scheme led by the EU.

“The failure to adhere to this informative idea could mean that Great Britain will become further isolated from its European neighbours.

“This reluctance may deter countries from attempting to strike up conversation around setting up air bridges with the UK.”

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