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Sun, May 19, 2024

GBPUSD is moving in descending channel and the market has rebounded from the lower low are of the channel.

The UK is all set to release their GDP data and analysts are expecting it to have a positive outlook which would mean good news for the GBP currency. Here is all you need to know about it:

BOE Breeden Speech

Sarah Breeden, who is the Executive Director of Financial Stability at the Bank of England, recently gave a speech regarding the link between monetary and financial stability in the country. She reveals, “Monetary and financial stability are complementary, representing two sides of the same coin. How they interact is complex. And recent years have presented challenges for both objectives.

EURGBP is moving in descending channel and the market has reached lower high area of the channel.

EURGBP is moving in descending channel and the market has fallen from the lower high area of the channel.

Having two separate and focused committees with overlapping membership has worked well. And these complex interactions have been managed through: shared analysis; policy action to build resilience in advance of potential stress; and targeted, differentiated operations when needed, all supported by focus and accountability for our distinct remits.”

Bank of England Governor Bailey speech

“We’re also exploring how we can more formally model some of the interactions between monetary policy and financial stability and how these may vary in different states of the world and in response to different types of shocks. I hope we can eventually create tools to help both committees think about issues that span both objectives. While we don’t yet know how long higher interest rates will persist, it’s clear that the FPC will need to continue to be alive to potential financial stability consequences, not least given known vulnerabilities in market-based finance. It’s also clear that there is an ambitious agenda for research to support us in our task. Luckily we have a great pool of diverse talent to draw on in the future, some of it in this room today. Can I encourage you to join us and so to make this ‘modern central bank’ even better.”

NI Brexit Deal Misunderstanding

According to sources within the government, the new commercial arrangements related to Brexit that are outlined in Rishi Sunak’s amended Northern Ireland protocol might take more than two years to completely execute. Businesses in Northern Ireland have indicated that they anticipate the HMRC and other government departments will launch a widespread educational campaign throughout the country to assist them in putting the deal that was announced in Windsor the previous Monday into operation, provided that it is approved by parliament.

GBPJPY is moving in a descending channel and the market has broken the lower high area of the channel

GBPJPY is moving in a descending channel and the market has broken the lower high area of the channel.

Nevertheless, because legislation is necessary in order to put the Windsor framework into effect, the implementation of the first of the new regulations might take many months. According to a source within the administration, the new agreement would deliberately provide industry time to prepare if it were to be passed. In practice, it will be implemented in stages beginning this year and continuing beyond 2024. Nevertheless, the implementation of revised labeling for items that transit over the Irish Sea via the new customs green lane will be staged, with the final step perhaps not taking place until July 2025 at the earliest.

UK Inflation rate came at 2 versus 2.3 expected and came lower than 2.5 in June

The implications of the arrangement for businesses are still being hammered out at this point. Later on this month, following a meeting of the UK-EU joint committee, which is a body that was formed to enforce the original exit agreement, the process that will begin to bring the deal into effect will get underway.

Farmers will also be looking for a swift enactment of the Windsor clauses, which reverse bans on the importation from Great Britain of seed potatoes and 11 native British trees, as well as a relaxation of rules regarding the use of second-hand farm machinery. Both of these things are important to the farmers. Due to the constraints, the Woodland Trust was had to call off the purchase of 22,000 trees that were intended for communities and schools in Northern Ireland in 2021, many months after the protocol went into effect.

Labor Market Crisis

The Bank of England (BOE) said that productivity was the key engine driving the average annual growth rate of 2% prior to the global financial crisis that occurred in 2008. After then, production dropped to only 0.5 percent of its previous level.

Yet, throughout that time period, the overall supply potential of the economy was held back by high levels of immigration, changes to welfare programs that forced more persons to seek employment, and an increase in the number of people who began working at a later stage in life. Every one of those components has started to migrate in the other direction at this point.

GBPCAD ending channel and the market has reached lower high area of the channel.

GBPCAD is moving in a descending channel and the market has reached lower high area of the channel.

According to the projections made by the BOE, there is currently a problem in labor supply and productivity, with approximately 500,000 more people of working age who are not actively participating in the labor force than there were prior to the implementation of COVID. This is a problem because it lowers productivity. The number of EU employees who come to work in the UK has decreased as a direct result of Brexit, which has further added to the situation.

Labor worker

Another evidence that the COVID disease is spreading rapidly is the quick rise in the number of people who report being inactive due to a long-term sickness. This rise has coincided with the emergence of the COVID disease. This can be interpreted to mean that the decrease in participation would persist for a longer length of time than was initially anticipated to be the case.

Non-Renewable Energy Crisis

The United Kingdom is at risk of missing a major objective to source green electricity and is compromising the country’s goal of reaching net-zero emissions. This is because the goal of reaching net-zero emissions has been compromised. The government said in 2021 that one of its objectives was to guarantee that all domestic electricity came from low-carbon sources by the year 2035. This objective was included as a component of the strategy to reduce yearly carbon emissions to zero by 2050.

GBPCHF is moving in descending channel and the market has reached the lower low are of the channel.

GBPCHF is moving in descending channel and the market has reached the lower low are of the channel.

The energy crisis began in late 2021 and was exacerbated by Russia’s invasion of Ukraine. Late in 2021, an energy crisis emerged, which was made significantly worse by Russia’s invasion of Ukraine. It is expected that by the year 2035, the demand for electricity will increase by up to sixty percent due to the transition away from using fossil fuels in vehicles and heating systems. This is due to the fact that the use of fossil fuels will be phased out.

Yet, despite the fact that the United Kingdom has set the year 2035 as the target date for the ban on the installation of new gas boilers, efforts to convince households to select low-carbon alternatives have been unsuccessful thus far. In response to worries that the surge in wholesale gas prices would make it difficult for a significant number of households and businesses to pay their energy bills, the government started granting bill subsidies towards the end of the previous year.

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