A recent survey by Deliotte suggested that over 60% of Company CFOS are expecting demand to remain low right into the second half of next year.
With covid cases still rising and Brexit talks appearing to have halted where will this leave the pound? At the time of writing GBPEUR currently sits just below 1.1000 but is struggling to make any further gains as so much uncertainty surrounds the economy.
Covid cases continue to rise and with the introduction of tighter social distancing measures across the country we appear to be gearing up to fight a long and slow recovery. Lloyds have cut its UK GDP forecast for this year and next. Month on month GBP growth slowed to 2.1% in August down from 6.4% in July and 9.1% in June. Predictions for 2021 full year forecast has been revised from 7.5% down to 6%.
The office of national statistics has estimated that 336,000 people in England had corona virus in the week ending the 8th of October this is up from 224,000 the previous week. This has prompted the government to look at new measures to stop the spread of COVID as we go into a long winter. The government have introduced a new three tier system with Liverpool and Lancashire being placed on the highest tier.
Ministers have also given Manchester Mayor Andy Burnham until midday today to agree to a tier three lockdown otherwise the government will be forced to intervene. Mr. Burnham believes the government are using selective statistics to frighten people into lockdown and does not believe economy crippling measures are the way forward.
We are yet to see what impact the new tier system will have on controlling the virus however Boris says this will be monitored closely. Boris has made it clear he will do anything he can in order to prevent a national lockdown once again as this would be detrimental to the economy however if cases continue to rise we may introduced to a Circuit breaker lockdown over the coming weeks.
Boris Johnson is playing hard ball and believes there is no basis to resume Brexit talks despite Michel Barnier saying he was willing to intensify talks this week in London. Post Brexit trade talks seem to have paused which led Michel Barnier to hold emergency talks on Monday with his UK Counterpart Lord Frost. Barnier had been told not to bother travelling to London for talks as was previously planned. Prime minister Boris Johnson appears to be disgruntled after he claimed the EU were not willing to compromise on a free trade deal following a disagreement at last weeks EU summit.
Barnier has confirmed via twitter that the EU remains open to intensify talks this week in London and is currently waiting for the UK reaction. The two teams remain to be in touch and Brexit talks look likely to continue with hopes that a Brexit deal is still possible.
On Tuesday 3rd November, the US will hold it elections with a two-horse race between Donald trump and Joe Biden. The polls are currently showing Joe Biden is leading the way to secure presidency. However, anything can happen over the following weeks as events unfold. In 2016 elections Hilary Clinton also had a clear lead over Mr. Trump however Trump pipped her to the post. Historically with any kind of political uncertainty we can expect to see some volatility in the currency so please get in contact with your account manager for the latest updates.
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