E The GBP Against A Second Lockdown - Is It All Doom And Gloom?

The British Pound has deepest declines against the Euro since March owing to a combination of an ECB-inspired rally in the Euro exchange rate complex since the Brexit trade. The Sterling also fell against other currencies due to data showing. The UK economy is not in a good place right now. 

Pound weakens following revised growth forecasts 

The UK had fallen deeper into recession, meaning that they need to recover their lost ground as soon as possible. What does it mean for exchange rates? The sterling fell quite sharply against other currencies and it was due to the fact that the economy is not as healthy as it was.

New Bank of England governor 

The oldest central bank in the world, The bank of England has a new governor. Andrew Bailey is the current head of the U.K.’s financial industry regulators. Bailey already has 30 years of experience at the British central bank. He was always seen as Safe hands by analysts who should be able to guide the U.K. economy through the Brexit transition and beyond. 

UK economy 

Employers in Britain are planning more than twice as many redundancies that they did at the height of the last recession. About 180 000 job cuts were planned from January to March 2009, while 380 000 were planned from May to July this year. Completed cuts could reach 735 000 this autumn. 

Social distancing measures to prevent the spread of COVID-19 brought large parts of the UK economy to force workers to stay at home. 

As a result of that, many businesses have been forced to reduce their employees. On the 8th of September, a Freedom of information request by the BBC revealed that employers had listed more than 380 000 positions as at risk between May and July of 2020.

Stock market recovery 

The British pound appears particularly vulnerable to any coronavirus-inspired stock market sell-offs largely because the currency is so heavily dependent on the flow of international investor capital into the UK.

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William K. 1 month ago Member's comment

It seems that the financial group that whose activities brought about the recession in GB evidently have not finished with making random changes in hopes of somehow producing a recovery. Exiting the EU may not provide the desired recovery either, and if not, then what?

The cyclical nature of economies is usually cause by the same sort of things that tend to reduce the stability of all feedback systems. And certainly economies are a feedback system, rather intended or not. Mechanical feedback systems, as used in machinery, are subject to the unchanging laws of physics, and so the requirements for stability can be learned. The "Laws" relative to operation of the financial system and the economy are probably just as unchangeable but much less clear. Or is it that they are much less acknowledged by those folks making the changes?