Pound Fights Back As U.K. Readies New Measures To Support Recovery
Investing.com – The pound found its footing against the dollar Thursday, after the U.K. unveiled fresh measures to protect jobs and businesses that helped ease fears about the impact of newly imposed lockdown measures on the economy.
GBP/USD rose 0.39%, to $1.2772.
As the second wave of Covid-19 sweeps across the U.K., forcing the government to take action to curb infections that would likely hurt the recovery, the U.K. Chancellor Rishi Sunak attempted on Thursday to ease the economic fallout.
Unveiled in the new plans, the U.K. will subsidize the pay of employees who have not returned to work full time but are working at least a third of their usual hours. The plan will start in November.
Ahead of the announcement, U.K. business – fearing that a second wave will trigger a surge job losses – had been calling on the government to renew support for the furlough scheme, which is set to expire at the end of October.
The new measures come as the U.K. reported a near-record rise in cases of 6,634 on Wednesday.
The move was welcomed by Bank of England Governor Andrew Bailey, though he appeared less optimistic on the economy. “It’s reasonable to think the fast pattern of the recovery over the summer is not going to continue in the same way,” Bailey said, according to a report from Reuters.
The reprieve in the pound could be short-lived, however, as the focus is set to turn uncertainty around U.K. and EU trade talks.
The EU has threatened to take legal action against the U.K. over plans to press ahead with the so-called internal market bill that seeks to undermine parts of the Brexit deal on Northern Ireland. The EU has set a deadline of the end of this month for the U.K. to scrap the bill.
– Investing.com