The EURGBP exchange rate was 0.15% higher on Tuesday as markets awaited the release of another Q1 GDP update for the eurozone, while the German economy saw the release of the latest ZEW economic sentiment data. The UK hospitality industry is warning of big job losses in the country.
The EUR to GBP rate is trading at 0.8606 and Thursday will see the latest ECB interest rate decision.
UK hospitality sees 500k jobs at risk
The UK hospitality industry has warned that the country could lose 500,000 jobs when the government’s furlough program ends.
Hotels, restaurants and bars are struggling with back taxes of £93 million that will become an unsustainable burden if the UK government fails to release the country from all lockdown rules on June 21st, Kate Nicholls of business lobby group UK Hospitality.
The comments came during a hearing in Parliament that described the scale of the strain being placed on businesses for more than a year. The government is reportedly considering a two-week delay to the full reopening.
Nicholls said that the industry is suffering labour shortages that will only get worse if the full reopening doesn’t happen as scheduled. Many workers from the European Union have left Britain for their home countries during the crisis and will face difficulties returning due to post-Brexit visa rules. It’s also the case that many workers will not be looking to move back, while students have moved out of towns and cities with everything being shut down and travel being unnecessary.
EU growth comes in higher than expected
A third estimate for EU GDP has seen a surprise improvement to the figures with a -0.3% loss. That was better than the previous estimates for a -0.6% loss that analysts had expected.
The year-on-year figure was -1.3% compared to expectations for -1.8% and the latest figures will be a boost for the European Central Bank, which meets on Thursday to announce its latest interest rate policy.
The bank will undoubtedly hold the key interest rate steady, but traders will be interested to see how the bank sees its bond buying program playing out and the stronger GDP will be another issue for traders to digest.
German ZEW economic sentiment popped the GDP bubble with a figure that was lower than expected. The market was looking for the figure to come in at 86, but it came in at 79.8. The euro versus the pound was muted after both data releases and may consolidate until Thursday’s ECB statements.
The country had been struggling with lockdown measures, but the recent move to reopening had been seeing an improvement and the latest figures will be a disappointment for the economic outlook.
The EURGBP has moved back above the 0.8600 level but the ECB and UK GDP figures on Friday could spur further moves.