Recent data shows that the British economy has started to stabilize after the Covid-19 ‘lockdown’ imposed last month. The lockdown imposed to curb the spread of the new variant pandemic has had an impact on the business and consumer sectors. However, vaccination campaigns have been able to increase the confidence of economic players and lead to recovery.
The manager booking index (PMI) released by IHS Markit shows encouraging readings. The UK manufacturing and services sectors each recorded growth exceeding market expectations.
Although still recording a contraction, which is below the reading of 50, UK business activity is seen to be higher than previous readings and market projections.
Overall, the UK economy began to rise but the Central Bank of England (BoE) stated that the UK economy experienced the biggest recession of 10% and will decline by 4% in the first three months of 2021.
The central bank expects a stronger recovery driven by the COVID-19 vaccination program although there is a possibility that the BoE will reduce interest rates below zero if unemployment remains high.
Prime Minister Boris Johnson is scheduled to announce further measures on Covid-19 on Monday. The pound, however, reacted differently by jumping higher to reach the price level of 1.4019 against the US dollar as of 10.45 p.m.
