Pound hits 33-month high as UK reaches 15 million COVID vaccine goal

LaToya Harding
·4-min read
Pound currently 0.3% higher, breaching $1.39, a level not seen since April 2018. Photo: Getty
Pound currently 0.3% higher, breaching $1.39, a level not seen since April 2018. Photo: Getty

The pound soared to a 33-month high against the dollar (GBPUSD=X) on Monday amid rising COVID-19 vaccine optimism.

It is currently 0.4% higher, breaching $1.3907, a level not seen since April 2018. It is also 0.31% up against the euro (GBPEUR=X) at €1.1469.

It comes as the UK has been among the leaders in getting people inoculated relatively swiftly against coronavirus, ramping up its vaccination programme in the country.

Over the weekend the UK government announced that its vaccine rollout met its target of 15 million people, in the top four priority groups, receiving their first jab by 15 February.

The pound breached the $1.39 mark on Monday, a level not seen since April 2018. Chart: Yahoo Finance
The pound breached the $1.39 mark on Monday, a level not seen since April 2018. Chart: Yahoo Finance

The country is much further advanced in its rollout than anywhere in Europe, after becoming the first country to approve the Pfizer (PFE) jab. The vaccine is now being expanded to over-65s and the clinically vulnerable.

“Assuming everything else goes according to plan this opens up the prospect that we could see a slow easing of restrictions sooner rather than later, with the next update on measures, due a week today,” said Michael Hewson of CMC Markets.

“This raises the much-discussed prospect that we could well see an explosion of pent-up demand, as consumers ramp up their spending in a form of post lockdown boom, which could see up to £150bn ($208bn) unleashed of excess savings over the next few months.”

WATCH: UK Hits 15 Million COVID Vaccinations Target

UK prime minister Boris Johnson, speaking during a visit to a vaccine centre in London, said there is need for "progress that is cautious but irreversible" ahead of his decision about when to lift lockdown.

"The question is a judgement of how quickly we can do that safely," he told Sky News. "These are the judgments that will be made this week and we will talk to everybody who has an input into that debate because it is a very important and fine judgment."

He added: "Clearly schools [reopening] on 8 March has for along time been priority of this government and families up and down country. We will do everything we can to make that happen but we have got to keep looking at the data."

"Rates are still very high, more than at the April peak last year, so we have got to be very prudent."

Britain was the first European nation to pass the 100,000 COVID-19 death landmark and the fifth country in the world after the US, Brazil, India and Mexico.

However, the number of new virus cases has plunged from a peak of 66,405 a day on 11 January to 10,972 on Sunday, bringing the total number of recorded infections to 4,038,078.

Seven mass vaccine centres have also now opened in England.

Ashton Gate football stadium in Bristol, Epsom racecourse in Surrey, the Excel Centre where London's Nightingale hospital is based, Newcastle's Centre for Life, the Manchester Tennis and Football Centre, Robertson House in Stevenage and Birmingham's Millennium Point will offer vaccines to people aged 80 and older, along with health and care staff.

READ MORE: AstraZeneca hopes for adapted vaccine rollouts six months after new variants found

As part of the vaccines delivery plan, the government hopes that all adults can be vaccinated by the autumn. It plans to have a total of 2,700 vaccine sites across the country.

The pound is also still benefiting from better-than-expected UK growth figures on Friday, which revealed that Britain avoided falling towards a double-dip recession last quarter.

Data published by the Office for National Statistics (ONS) showed that GDP declined by 9.9% last year, which was the largest contraction on record.

The annual slump wiped out seven years-worth of growth, taking the UK economy back to the size it was in 2013.

As recently as last month economists were predicting a double-dip recession for the UK, believing GDP had contracted in the final quarter of 2020 and would do so again in the first quarter of 2021.

Friday's confirmation that the economy escaped decline at the end of last year puts the UK on a path to avoid this fate. It would have marked the first double-dip recession — two recessions in swift succession — since the 1970s.

Another strict and lengthy lockdown at the start of 2021 means the economy is likely to shrink over the first three months of 2021.

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