The AUDGBP exchange rate sank last week as the Bank of England feels the heat over rising inflation. An improvement for the labor market has traders expecting a rate increase in December. Large protests have been seen in Australia against coronavirus restrictions.
The AUD to GBP exchange trades at 0.5375 as the week begins with no high level economic data due this week for both countries.
NSW and Victoria close in vaccine milestones but will it matter?
Victoria was “very, very close” to reaching the 90% mark for double vaccinations among residents, according to the premier Daniel Andrews. The problem for Andrews and other Aussie politicians is that vaccines are proving to be less effective and Europe is moving towards lockdowns.
The Australian parliament is getting ready for its final two weeks of the year, with Queensland senator Gerard Rennick and South Australian senator Alex Antic saying they would withhold their vote from all legislation unless vaccine mandates are ditched.
Meanwhile, opposition leader Anthony Albanese has criticised prime minister Scott Morrison of pandering to protestors tor not condemning violent demonstrators protesting against vaccine mandates. Morrison has taken criticism for urging states with mandates to allow freedoms for the unvaccinated.
“The prime minister should be capable of just showing leadership, not being weak, and saying these comments and this behaviour is unacceptable in Australia in 2020.
I hold the prime minister responsible for failing to call out unequivocally, the violent and extreme comments that are made, the taking of gallows, the threatening of Labor MPs and premiers and independents.”
His comments come as protests erupt around the globe over the continued restrictions and rules being enforced.
BoE chief economist casts doubt over December hike
The Bank of England’s chief economist has added some doubt to the debate over an interest rate rise before Christmas.
Huw Pill, who replaced Andy Haldane this summer, said there was a growing need to act and get inflation back under control.
But he also said there was no guarantee that a hike would come next month, saying: “I genuinely do not know today how I will vote.”
Prices are rising rapidly with inflation hitting 4.2% – the highest level for a decade. The pound sterling is rising against other major currencies as it becomes one of the first countries to move rates higher.
Another problem for the country is that servicing costs for Britain’s national debt more than tripled last month as inflation sent interest payments higher. The Office for National Statistics said the Government spent had spent £5.6 billion on debt interest in October alone.
That amounted to £180 million a day and was more than 200% higher than the £1.8 billion spent on interest in October last year.
The Australian dollar versus the British Pound will likely continue to move lower as traders expect a December rate hike. Last week’s inflation report will surely see a move of some sort in December.
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