Mixed couple of days for the Pound
Firstly to the UK's GDP figures that were released yesterday for February and both the MoM & YoY readings were better than expected. The boost came mainly from the construction and services sectors that have been able to continue their strong performances this year. The initial data also shows there was an improvement in exports to the EU after January's 'off the cliff' figure.
There is sure to be a sharp rise in GDP for March & April, but we won't see the projected uptick until this time next month. The weeks figures so far for financial transactions and footfall at stores, bode very well and i wouldn't be surprised if the IMF further upgrade the UK's growth forecast for this year by the summer. Talking of summer and seeing as holidays abroad are still very much uncertain, many households will choose to vacate at home this year. This will actually be a huge benefit to the UK economy and i wouldn't be surprised if the Government have this in mind when determining how overseas travel starts back up.
Economic sentiment amongst EU businesses slumped unsurprisingly for April. The third wave of covid-19 cases and potentially further lockdowns to come, have understandably unsettled people's views on their near-term future. The views of the British people on the other hand, is completely the opposite with the vast majority believing the worst has passed and the only way is up. Sentiment like this plays a huge part in consumers financial thoughts, the more positive, the more inclined they are to spend money.
A negative this week comes in the form of a resignation from the BoE's chief economist Andy Haldane. Haldane's hawkish views and optimism for the UK has aided in £ strength this year. His exit from the bank will remove a voice for interest rate hikes and faster tapering and raises questions about who may replace him.