On Tuesday (Nov. 10) in European trading, the pound continued to pull up, rising 100 points, or 0.8%, on the day against the dollar to 1.3269, a 2-month high. The euro against the pound fell to 1%, at 0.8894, a new low since August 31. The euro, meanwhile, fell below the 1.18 mark against the dollar. Sterling’s rise was driven by two major developments.
Controversial elements of the Internal Market Bill were rejected
On the one hand, the rejection of the controversial content of the Internal Market Bill is expected to speed up the Brexit deal, after the Internal Market Bill had sparked discontent in the EU. On the 9th of local time, the House of Lords of the British Parliament voted overwhelmingly to delete two controversial provisions of the Internal Market Bill. At the same time, British and European representatives in London to continue negotiations on bilateral trade agreements.
The UK House of Lords reportedly removed a key provision of the Internal Market Bill with 433 votes in favor and 165 votes against. Other similar clauses are expected to be removed in subsequent votes.
It is understood that the clause allowed the Johnson government to unilaterally overturn parts of the Brexit deal relating to Northern Ireland. A UK government spokesman said after the vote that the government was disappointed that the House of Lords had voted to remove the clauses from the Internal Market Bill and that it would reinstate them when the bill returns to the House of Commons for reconsideration.
There were also signs of optimism in the UK-EU negotiations
On the other hand, according to the statements of people involved in the negotiations, the UK-EU trade talks are currently more optimistic. The British Chancellor of the Exchequer Sunac said in the early morning of 10 Beijing time, we have made significant progress in the EU negotiations, we can reach an agreement. The UK and the EU are interested in reaching an agreement on financial services reciprocity, but the EU will not agree to reciprocity with the UK in many areas.
As previously reported, the U.K. officially left the European Union on January 31 of this year, followed by an 11-month transition period. If the UK and Europe do not reach a trade agreement during the transition period, trade between the two sides will return to the World Trade Organization framework from 2021, reimposing arrangements such as border checks and tariffs.
In this regard, Johnson said on the 8th, Brexit agreement “outline” is very clear, the agreement “to be completed”. But he also insisted that if the final stage of negotiations with the EU is not successful, the UK has been fully prepared. The EU also said, will not at all costs to reach an agreement.
British retail services by Brexit + epidemic double attack
It should be noted that while the optimistic progress of Brexit will boost the pound in the short term, the outlook for the pound to face after the Brexit dust settles is not optimistic. The uncertainty of Brexit, coupled with a second round of wide-ranging blockade measures, has dealt another blow to the UK retail and services sector. A recent survey in the UK showed that nearly 20% of retail services firms had difficulty surviving the first round of wide-ranging blockade measures, which began in March.
The number of people looking for work in the UK surged by almost 250,000 in the past three months to September, with unemployment rising to 4.9% in September alone, the highest level since 2016. At the time, the government reimposed restrictions in response to the rising number of new crown cases.
UK Chancellor of the Exchequer Sunac said last week that the government would pay 80 percent of the wages of staff unable to work full time due to the outbreak by the end of March next year, prompting economists to predict that unemployment would peak at a lower level than previously expected. Terje Parikh, chief economist at the Institute of Company Directors, said: “Employers face tough decisions about retaining staff this autumn as government support will be reduced.”
British retail data analysis companies Local Data Corporation and PricewaterhouseCoopers surveyed 43,766 retail services companies with more than five outlets within the United Kingdom, found that nearly 83% of the first round of the government’s “blockade” after the end of the resumption of business, more than 2,000 permanent closure, another 5,552 so far has not opened, the future is bleak.
The Times (9) cited the results of the survey, reporting that suburban retail businesses had the highest success rate in reopening their doors, while many city centers were slow to reopen due to the popularity of telecommuting and the downturn in tourism.
In another survey, called the “UK Retail Chairman Survey”, management consulting firm Glory International surveyed 40 heads of major retail companies in the UK, and found that nearly half plan to lay off staff in the next six months, more than a third plan to close more stores, and a third do not expect to hire within six months. The companies surveyed have a combined annual turnover of around £150 billion (1.3 trillion yuan) and employ more than two million people in total.
According to The Times, the findings show that the UK retail sector faces continued turmoil, with the “blockade” accelerating the push for stores to operate online.
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