UK debt exceeds output
Sterling had its worst week since mid-May after data releases on Friday showed government borrowing had hit record highs. Britain’s public debt exceeded economic output for the first time since 1963 which illustrates that the coronavirus has had a damaging impact on the British economy and an economic recovery is a long way away. Further stimulus provided by the Bank of England provided little support for the pound also.
Brexit related risk also continued to weigh down the pound as a lack of progress is impacting sterling. Boris Johnson has told French President Emmanuel Macron that a post trade deal must be concluded by autumn and Angela Merkel also echoed these thoughts.
The dollar rose to its highest weekly gain in a month as fears of a second wave of coronavirus increased demand for safe haven assets like the dollar. With infections rising in the US along with a new outbreak in Beijing, this has raised concerns of another global lockdown.
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