"The Queen produced the quote of the week when posing for a photo with G7 Leaders. She asked ""are we supposed to look like we are enjoying ourselves?''

It is likely she wasn’t the only one asking the question although most kept it to themselves.

The G7 Summit hosted by Boris Johnson was a qualified success, with general consensus around the major issues.

There were plenty of sidebars to the main event with Johnson displaying his usual bonhomie to EU leaders, although beneath the surface the level of trust between London and Brussels continues to be an issue.

French President Macron appeared at one point to promote Northern Ireland as not being part of the UK. Maybe this was an advance warning of the EU’s position on a united Ireland.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The UK continues to struggle to find workers to fill roles in the hospitality sector as the exodus of EU workers created by Brexit hits home.

With British workers content to move on to better paid roles with less onerous hours, there is a danger that rising inflation will contribute to higher wage demands in what could become a vicious circle.

It is some time since pay negotiations particularly in the Public Sector were a significant factor but as the recovery takes hold whether the 21st of June reopening happens or is delayed for a few weeks, longer term the country could become a victim of its own success.

The UK Chambers of Commerce, in a report published yesterday, forecast full year 2021 GDP to reach 6.8%, although this is dependent upon Boris Johnson’s Roadmap being fully complied with.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The interconnectedness of global affairs has been laid bare by the UK’s row with Brussels over goods moving through Northern Ireland, as it may now have a bearing on London’s ability to agree a trade deal with Washington.

The media has picked up on the irony of the EU’s policy banning the import of meat products, which means that the mainland UK cannot sell sausages in Northern Ireland.

Boris Johnson has adopted his usual style of negotiation with Brussels by simply ignoring the issue, commenting that there is a deal to be done.

Brussels’ Trade Minister, who was in London yesterday, used strong language about the deal that has already been done, and called upon the UK to honour its commitments.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Andrew Haldane, the Bank of England's Chief Economist, for whom the next MPC meeting will be his last, spoke yesterday of his belief that any overheating in the economy will manifest itself in the property market first.

He described the market as being on fire, due mainly to the disparity between supply and demand.

The Government’s support for the economy has led people to see an opportunity although this effect will fade as quickly as it has started as Chancellor Rishi Sunak has already announced the end of several support schemes.

The short-term continuation of tax breaks, the growth in the savings rate and the increasing equity as prices rise are driving the market which saw a 10% rise in average prices in the 12 months to March.

While this activity is positive for the recovery it can lead to widening of the gap between the well-off and young first-time buyers who will find raising a deposit that much more difficult in years to come."

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The Prime Minister wants to create a closer bond between the Government and the City of London’s financial market in order to determine that current and future legislation is friendly to the market and ensures that it maintains its dominant position globally.

There is sure to be further competition from Paris and Frankfurt to try to take business away from London as Brexit matures, but Johnson is determined to ensure that the City receives as much help as it needs from his government.

Competition from Brussels is going to be an ongoing theme in the post-Pandemic period. It is clear that the EU is determined that London won’t gain any advantage from its departure from the EU and any loophole will be quickly closed.

The highest profile dispute: over fishing rights, is set to continue for some considerable time and could escalate as traditionally militant French fishermen are determined that they should be allowed to fish in British coastal waters.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"G7 Finance meeting ahead of the upcoming summit have agreed a global taxation regime to ensure that global tech, and social media companies are being taxed at the right rate.

The right rate appears to be 15%.

However, it is clear that the deal was in fact cooked up by the U.S, so they will benefit the most. Furthermore, if you plan to add taxation, and those about to be taxed welcome the move, clearly, the rate is far from draconian.

The G7 meeting will take place in Cornwall this weekend and will concentrate on vaccinating the world, climate change, and how to cooperate to ensure that the recovery from Covid-19 is robust globally.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The UK recovery continues to gather pace but as mentioned yesterday, it is impossible for the Government to please everyone.

The howls of protest heard yesterday as Portugal was removed from green on the traffic light system to amber means that the only viable mass holiday destination now requires five days of isolation and a single negative Covid test for returning travellers.

Accusations, especially from the tourism industry, centre around a promise the Transport secretary apparently made that he would give three weeks’ notice of any negative change to a country’s status. If he did make such a promise, it would have been incredibly naive since the situation with new variants is so fluid.

Yesterday’s move clearly illustrates the Government's priorities. It remains committed to the complete removal of restrictions in England and sees foreign holidays as insufficiently important to risk a benefit to the entire country.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"It continues to be likely that the UK will remove all Coronavirus restrictions on June 21st.

This will be considered a risk no matter the data that the Government sees over the period between now and then.

This will be considered a positive outcome given the efforts being made within the Eurozone to drive growth in their own services output post-Brexit.

Earlier this week, the OECD radically increased its forecast for the UK economy’s performance over the remainder of the year. It forecasts that full year growth will rise to 7.2% this year and 5.5% in 2022.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Official data shows that the UK recorded zero deaths from Covid-19 yesterday. This is the first time this has happened in 445 days. Despite it probably being due to the delay in reporting data over the bank Holiday weekend, it is being seen in the media as both a significant step in the recovery and a reason for the Government to press ahead with the full reopening in three weeks’ time.

Continuing the theme of positive news for the recovery, data yesterday showed that UK manufacturing output grew at its fastest rate in nearly 30 years and house prices rose by the largest margin in seven.

This drove the pound to its highest level in three years against the dollar.

The outlook for the pound remains mixed since most of the good news on the recovery, number of vaccinations and cases of Coronavirus is now priced in.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Andrew Haldane, the outgoing Chief Economist of the Bank of England is incredibly bullish about the UK economy in light of the volume of stimulus that has been provided during the time of the Pandemic.

However, he has also raised the spectre of a long-forgotten bogey man of the bad old days of wage inflation.

Given the rate at which the economy is recovering and the continued pent-up demand that is still to be satisfied, Haldane is concerned that trades Unions will begin to believe they can anticipate higher inflation by pre-empting a fall in workers real wages by demanding increases well above the current rate of inflation.

This would create a wage/price cycle not seen since the seventies.

There is already something of a skills shortage developing as the economy reopens and such militancy could see the UK’s recovery derailed.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.