The Pound Sterling is stuck under the level of 1.3800 versus the US dollar. That was announced in the trade three days ago or on Friday. What are the causes? 

There are several aspects which cause that condition and press the GBP/USD value. Thee example is a statement made by the BOE governor which was quite dovish. 

Some other causes are like the hawkish policy direction by the Fed, the global risk-off sentiment increase, and the disappointing British economy data so far. 

The Latest Economy Growth in England

The yesterday report showed that the British economy grew up by 0.8 percent month – over – monyh in May 2021. That was just a half from the consensus expectation of 1 5%.

The other economic data for the same period also have the same trend. They are far from the expectation. The industrial production just grow up by 20.6 percent versus the market expectation. 

For your information, the market expectation is around 21.6% year – on – year. Meanwhile, the manufacture output only grows by 27.7% versus the market expectation of 29.5% year – on – year. 

The ONS or “UK office for National Statistics” think that the economy in UK is still 3.1% under the pre-pandemic level. The economists stated the causes of those disappointing numbers. 

The Increasing Cases of the Coronavirus

The disappointing numbers shown is maybe about the increasing cases of the coronavirus. The May GDP report is like a splash of cool water for some of the market participants right now. 

It is especially for them who expect to back to the peak on the third quarter period. A little momentum outside the hospitality sector. The rising COVID-19 cases bring its impact and it real. 

Based on the fact, the cases are rising again in some countries in the world. They are fighting for the second, third, or fourth waves in their area. That needs to be handled as soon as possible. 

That leads to a slower growth again in June. The British Economy has been experiencing the amazing second quarter. Again, the coronavirus pandemic may delay the summer recovery. 

The UK Consumer Confidence Could Falter

At the beginninh of this week, the Deutsche Bank released their research result. It stated that the rising COVID-19 cases amount can bring the negative effect for the UK consumers confidence. 

It is especially in some weeks ahead. The economoc activities can be disturbed as well. The situation is going to be worse if the government really end up the whole social restriction. 

The information is that the government may end the lockdown in 19 of July 2021. That could be an ineffective decision, especially if the pandemic is still harmful for the publics there. 

Some experts and analysts think that the decision must be revised again. The government should check and ensure everything before they really open the social restrictions in the country. 

The Concerns that Must be Considered

Shreyas Gopal gave his statement when met the media several days ago. He is s strategy expert of the Deutsche Bank. Gopal can clearly see the relation between all the things. 

He and the other experts are more concerning about the direct minor support from the 19 of July opening is balanced by the indirectly effects. That is the most possibility to happen. 

There is a relationship between the increasing cases level and the consumer confidence. It is clearly seen that the confidence can be lower too since the pandemic is still there. 

That situation continues to happen although vaccinations have been done widely. So many people believed that it can reduce the possibility to get a severe illness. It is especially about the coronavirus.