BoE Governor sets out a gloomy outlook for UK economy

The biggest economic news this week came yesterday when the Governor of the Bank of England, Andrew Bailey delivered a speech at the ECB’s conference in Portugal.

In his speech, Bailey said: “I think the UK economy is probably weakening rather earlier and somewhat more than others.”

He also hinted that interest rates could rise by 0.5% at the next monetary policy meeting in August and that the Bank was ready to take more forceful steps should the need arise.

In the middle of the week, we saw figures released showing that US GDP was slightly lower than expected at -1.6% and that UK GDP was where it was expected to be at 0.8%.

As the week closes, we’ve seen multiple variations across news sources that the numbers are now showing that Sterling has had its worst six-month period since the initial post-Brexit period in 2016.

We’ve seen the pound stay pretty steady against the Euro ending the week where it began. However, against USD, we’ve seen a drop of a couple of points in the last few days. The week has also seen Euro/Dollar move a little closer to parity, something many commentators are now predicting as inevitable.

Around the world, we saw Russia default on its sovereign debt and in Sri Lanka, petrol sales have been severely restricted/banned as the country grapples with a very difficult economic and political situation.

To end on something bizarre and yet slightly comical this week, in North Korea, the esteemed Supreme Leader Kim Jong Un has formally declared that Covid-19 was in fact brought to earth by ‘alien things!’

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