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Market Update

• Posted by currencies in Bank of England, Brexit, coronavirus, GBP, Sterling, UK, Uncategorised
• July 17, 2020
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The pound eased slightly in early London trade, set for its biggest weekly fall versus the dollar in a month, as uncertainty over Britain’s economy, difficult Brexit talks and a heavy COVID-19 death toll weighed on the currency.

The pound is on track to be the worst performing G10 currency this week, after weaker economic data raised concerns over the possibility the Bank of England will introduce negative interest rates.

The pound has had a slightly more negative week over concern that weaker data will prompt further action on the rates front from the Bank of England at its September meeting.

The government’s chief scientific advisor said Britain had not achieved a good outcome in dealing with the COVID-19 pandemic and he was sure mistakes had been made. Britain has the highest COVID-19 death toll in Europe.

With British gross domestic product data for May rising less than expected, investors are questioning whether the fiscal stimulus measures already announced will be enough to prop up the economy.

Fewer British workers lost their jobs in June, official data on Thursday showed, but economists said unemployment was still expected to jump.