Good morning,
Despite an eye-watering GDP figure released out of the UK this morning, the British pound is still holding at levels seen during yesterday’s trading session. The Office of National Statistics released the figure for economic activity for April at 06:00 BST this morning, showing that the UK economy has contracted by 20.4%. This is the biggest fall on record. For perspective, during the downturn in the 2008 financial crisis, the largest monthly drop was registered at 6.9% before the economy started to grow again.
As expected, the global impacts of lockdown were always likely to produce dire economic results; as consumers are confined to their homes whilst pubs, shops, restaurants, offices, factories and planes were left empty with spending being limited. The saving grace for GBP with this release is that this scenario is hitting nearly every country. As analysts have been reporting since the lockdown was implemented, it is a race to see which country can return to normal activity. Chancellor Rishi Sunak has said he believes with the UK’s furlough scheme that the country is in the best position possible for a quick economic recovery. Non-essential shops are due to reopen on Monday, in a bid to encourage spending in the latest step to normality.
UK Prime Minister Boris Johnson and European Commission President, Ursula von der Leyen, are due to meet to hold Brexit talks on Monday 15th June in a bid to break the deadlock which the two negotiating parties have found themselves in following the previous round of trade talks. The UK’s chief negotiator took to Twitter last night to reiterate the UK’s firm positioning that an extension to the negotiating period will not be on the table. Later today, Michael Gove will also deliver a speech where he is expected to reiterate the position of the UK, leaving it to the two leaders to forge the path ahead.
Have a great weekend,
Author: Jack Nicholls, Relationship Manager
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