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Pound under pressure after England's lockdown extension

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·1-min read
Britain's prime minister Boris Johnson. Photo: Justin Tallis/Pool/AFP
Britain's prime minister Boris Johnson. Photo: Justin Tallis/Pool/AFP

The pound weakened against the euro and dollar on Thursday, following confirmation that England’s current lockdown will persist for at least another five weeks.

At a Downing Street press conference on Wednesday evening, UK prime minister Boris Johnson said schools would remain shut until at least 8 March. He promised to set out a fuller plan for unlocking the economy towards the end of February.

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While ministers had suggested restrictions could remain in place until March, the confirmation is a blow for the economy. Non-essential retail is not expected to reopen until at least April while pubs and restaurants could be shut until May, according to the Telegraph.

Pound-dollar day chart. Source: Yahoo Finance
Pound-dollar day chart. Source: Yahoo Finance

Sterling was down 0.2% against the euro in early trade on Thursday to reach €1.1272 (GBPEUR=X). Despite the dip, the pound remained close to 2021 highs against the pairing.

The pound was down 0.4% against the dollar to $1.3637 (GBPUSD=X).

Daniel Noonan, an economist with AIB, said there was a “risk-off tone” that was supportive of the dollar.

The FTSE 100 (^FTSE) was down more than 1% amid a wider global sell-off for equities.

WATCH: Schools won’t reopen till March