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UK pound drops to 2021 low due to concerns over new Covid solutions

The pound fell sharply a year later against the dollar on Wednesday when hopes for a new coronavirus ban crashed the UK’s economic prospects.

Sterling sold 0.5 percent down to $ 1.317 after the Financial Times reported Boris Johnson is designed to make it possible “Plan B” of other restrictions, including the need for vaccine passports in large areas and the call to work at home with the aim of preventing the spread of Omicron species. The UK currency plummeted against the euro, hitting £ 0.856.

Investigators say such a move by the government will increase economic uncertainty and could prevent the Bank of England from raising interest rates – for the first time since the epidemic began – later this month.

“Raising restrictions on people who are asked to work from home reduces growth,” said Lee Hardman, an economist at MUFG. “It means the Bank of England has a chance to stop raising prices until February.”

Sterling had fallen earlier this month, especially after Michael Saunders – one of the hawkish tree producers at the BoE – he said last week that the release of Omicron meant that there was a “good” wait before you could tighten the monetary policy.

The risk of a mortgage increase of up to 0.25 per cent has now been bought by markets in almost one-third of the year, compared to about 75 per cent before the new gap was found.

The fall of the pound reflects Omicron’s distinct change in the expected financial direction on the opposite sides of the Atlantic. Federal Reserve chairman Jay Powell last week expressed his support for the immediate withdrawal of a major US banking program, and opened the way for early boarding, despite the risks posed by Omicron’s rapid rise.

Advertisers are now betting that the Fed’s first rise will come in June, four months after the first BoE hike, now in February. However, recent changes have prompted the Fed to relocate, Hardman said. This could signal a major change since last month’s BoE meeting, when markets soared that the central bank surprised investors by keeping quiet.


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