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GBP snaps two-week winning streak on poor economic data

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The UK is now one of the worst affected countries by the progression of the coronavirus pandemic in Europe, with a total of 634,920 cases and 43,018 deaths.

Sterling has lost 1.16 percent against the U.S. dollar so far this week, snapping a two-week rally ahead of a summit of EU leaders on Thursday and Friday.

EU leaders are set to discuss Brexit negotiations and are expected to give guidance to the EU’s chief negotiator Michel Barnier on what steps he should take to move talks forward as the year-end deadline approaches. The media reported that they plan to say that progress in talks with the UK is still not enough to reach a trade deal and that they are instructing the chief negotiator to step up talks with the British government, possibly discussing what concessions they can make to the UK to move forward in negotiations.

Britain insists on banning EU members from its fishing waters, a proposal seen as outrageous given the UK’s ambitions to remain in the EUsingle energy market. German Chancellor Angela Merkel commented on this issue that the European Union would need more realistic’ in fishing rights trade-offs, stressing that reaching an agreement should be in the interest of both parties. Moreover, progress in negotiations on trade and security issues is now essentially on hold, adding to the pressure.

The UK is now one of the worst affected countries by the progression of the coronavirus pandemic in Europe, with a total of 634,920 cases and 43,018 deaths. Due to the recent increase in cases, Prime Minister Boris Johnson has announced a new three-tier system of restrictions. Most of the country is currently at its lowest level, although places such as the Liverpool region will face the most severe restrictions.

Bank of England Governor Andrew Bailey noted on Monday that the British economy could struggle more than expected to recover from the effects of the health crisis on the economy.

GBP snaps winning streakWe think all the risks are unfortunately all on the downside,” he said during a question-and-answer session. On Tuesday, after being asked if the bank planned to do that, he added that the bank was not yet talking about introducing negative cash rates, so the bank’s monetary policy committee was unable to say at this time if there was a tool they would use.

Bailey’s claim comes after Bank of England policymaker Jonathan Haskel said the bank was open-minded to the possibility of cutting cash rates below zero, adding that despite the fact it could affect the banking system’s profits, the move could have a positive impact. effect on the British economy as a whole.

The British Retail Consortium reported that retail sales rose 6.1 percent (year-on-year) in September, less than expected as analysts polled had expected growth of 8.2 percent, but higher than August’s figure of 4.7 percent.

On Tuesday, the Office for National Statistics recently reported that the unemployment rate from June to August 2020 was 4.5 percent, a bigger-than-expected increase and higher than the final figure for the previous period. The number of applicants increased by 7.6 percent in September, and the number of unemployed increased by 28,000. Average earnings were unchanged in the three months to August, after falling 1 percent in the previous period. Excluding bonuses, average earnings rose 0.8 percent, following a 0.2 percent rise in the previous period.

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