Sterling rallied across the board yesterday after BOE Senior Policymaker Gertjan Vileghe said an early interest rate hike is possible providing there is a smooth transition of workers from furlough back to employment. The first rate rise is not expected to occur until late 2022, however Vileghe who is normally considered to be a 'dovish' member of the BOE shows that the BOE is cautiously confident moving forward. He also stated that the UK is not on course for inflation rates to return to those seen in the 1970's.
Cable moved beyond 1.42 from lows of 1.4120 whilst GBPEUR pushed just beyond 1.1650.
The recent return of indoor seating at restaurants has meant that bookings to the week of May 24th are at 132% of the level in the same period of 2019. The number of workers on the government furlough scheme has dropped by two points to 8% which is the lowest level of 2021 so far.
Boris Johnson has been warned by business leaders that a fresh package of economic support would be required if rising Covid-19 infections prevent the further relaxation of pandemic restrictions next month. But the recent Re-opening of retail and hospitality facilities should provide positive GDP growth for the latter part of Q2 and beyond
The number of Americans filing new claims for unemployment benefits dropped more than expected last week as layoffs subsided, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.
