30 March 2021
Sterling remains well supported as the avoidance of a no-deal Brexit, alongside a rapid vaccination rollout in the UK continues to boost sentiment. Lockdown measures eased further yesterday, allowing six people to meet outside for the first time in three months. The government also announced an extension of the business support program, despite a BoE report released yesterday showing consumer borrowing is at a 12-month low.
The US President is expected to announce a $3 trillion infrastructure stimulus program this week. While the intended impact is to boost economic growth, the fear amongst investors is that it could push inflation much higher. This could force the Fed to raise interest rates sooner than expected, although Chair Powell believes price rises will be temporary.
Stock markets began the week in negative territory as global concerns over economic growth weigh on sentiment. Europe is now facing the reality of a third wave, and renewed economic restrictions, which will undoubtedly dampen economic growth further. The political pressure is building in the bloc, and some are now calling for a more nationalistic policy toward vaccine supply.
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