The AUDGBP exchange rate was slightly lower on Thursday as traders awaited the latest GDP data from the UK into November. The latest number will show the economy’s performance ahead of the Omicron surge and the latest restrictions. The Australian dollar was also weaker against the Pound as virus levels are at a record in NSW but dropped by 20,000 in the UK.
The AUD v GBP is now trading at 0.5310 and the pair will also face Australian home loans data.
UK economy hopefully past Omicron but £35bn hit looms
The latest coronavirus figures from the UK showed a drop of 20,000 cases with hopes that the Omicron variant may be peaking. In Australia, New South Wales reported another record at over 92,000, while Victoria logged over 37,000.
If the UK has seen the variant peak, it will still face a £35 billion hit over January and February, according to a report by the Centre for Economic and Business Research. The figures are based on government assumptions of a 25% absenteeism rate.
Meanwhile the UK and Australia are both taking action to tackle worker shortages from the Omicron isolation surge. The UK Health Secretary Sajid Javid has said that the UK will now cut the isolation period to five days from seven.
Aussie Prime Minister Scott Morrison has also scrapped restrictions for key workers in stretched industries who are close contacts of positive tests. The aim is to halt the growing food shortages and worker shortages in the Australian economy.
Retail store giant Woolworths has reintroduced the two-product limit for customers on certain essential products due to empty shelves in the country recently.
Economic data ahead for the UK and Aussie economy
Britain’s economy will highlight how it was performing ahead of the latest restrictions with a three-month GDP number into November. The Omicron variant emerged around the end of November and data since then has seen struggles for the services sector in particular, with Christmas bookings cancelled.
The latest reading is expected to come in at 0.8% after a reading of 0.9% last month and a lower number would put pressure on the Bank of England as stagflation looms. The latest inflation rate was 5.1% in the country and that is moving well ahead of wages with citizens already squeezed by energy and clothing prices.
The Bank of England raised interest rates in December and the International Monetary Fund has urged them to hike again in their next meeting. Today’s figure could play a big part in their decision.
Meanwhile, the Australian economy was waiting for the latest reading of home loans data. The expectation is for a reading of 0% after last month’s drop of -4.1%. Home loans were hit by the latest round of lockdowns in Australia, but retail sales data surged on Monday as consumers were allowed back out to spend.
The pound sterling got some respite from the selling on Wednesday on the Boris Johnson party saga, but the inquiry will decide the outcome.
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