The U.K. economy’s fall in the second quarter was the worst performance of any major European economy during the pandemic. GDP plunged 20.4%, double that of Germany. This is the largest quarterly contraction in the UK economy since Office for National Statistics (ONS) quarterly records began in 1955. This marks the second consecutive quarterly decline after GDP fell by 2.2% in the previous quarter, technically putting England in a recession.
It’s worth noting, prior to the recession, January, England’s economy only grew 0.1% month to month, which was much weaker than expected. So their economy entered the storm in bad shape. The fundamental issue with England’s economy is the fact productivity has been low and hasn't been growing for years…I believe Brexit had a lot to do with this.
Three and a half years after the United Kingdom voted to leave the European Union, the U.K. is still subject to all E.U. laws and regulations until at least the end of 2020 and this transition period could be extended by up to two years. And the U.K. faces a more daunting task: securing an agreement on its future relationship with the E.U., including the finer details of trade, security and data sharing.
The British FTSE 100, the index of the largest companies on its stock exchange, is no where near pre-COVID levels. While the DOW, for example, is back to around 95% of its pre-COVID value, the FTSE is still down at around 83% of its pre-COVID value.
With all that’s going on right now in Britain, where is the British Pound heading next, lets go to the charts to find out?
Monthly Chart (Curve Time Frame) - monthly supply is at 1.4800.
Weekly Chart (Trend Time Frame) – the trend is sideways.
Daily Chart (Entry Time Frame) – since price is range bound at the moment, there is no set-up at this time.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
