Good morning,

Markets are still digesting the news confirming the ‘big bang’ reopening of the economy and the lifting of all restrictions.

GBP has reacted positively thus far, but there are questions being raised as to how long it could last. Whilst it’s seemingly true that the link between infections and hospitalisations has been broken, health secretary Sajid Javid still expects infections to hit 100,000 cases by mid-summer. This could result in 15,000 extra deaths this year.

This could in turn exert pressures on the PM’s plan, who has shown in the past that he’s not afraid to make U-turns when it comes to these decisions. Markets are however unlikely to wait for this. Sterling could tumble if the Delta variant continues to spread.

Another developing headwind has come in the form of renewed Brexit woes, this time over the implementation of the Northern Irish protocol. While it’s safe to say that it’s not the sterling mover it once was, any negative developments with Europe are anxiously watched by markets.

Have a great day.

Thomas De Caluwé, Relationship Manager.

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