GBP/INR is slightly up in early trading on Tuesday. The pair has added 0.03% so far to 91.009 as of 06:30 AM UTC.
The price has been trading inside a bearish channel since October 20 and has been approaching the resistance line since yesterday.
If the quotation breaks above the 91.00 level within the next few hours, then another short-term uptrend could be seen.
UK Parliament Rejects PM’s Election Bid
The British pound would have probably broken the resistance line by now if the UK parliament hadn’t rejected Prime Minister Boris Johnson’s call for a general election on December 12.
Yesterday, members of parliament (MPs) put the election bid on the vote, with 299 MPs supporting it and 70 voting against. However, even this wasn’t enough, as Johnson needs no less than 434 votes (two-thirds) in order to pass the bill.
The prime minister hopes that another early election would strengthen his governing party’s position, giving him a free hand in managing Brexit according to his plans.
On the other side, the opposition Labour Party said that Johnson had to make sure to rule out a no-deal Brexit in order to get support for his election bid.
The PM doesn’t want to give up his ambition and will call for a general election again today.
Indian Economy Needs Fixing
Even though the British pound is in bearish mood against majors, it still edges up against the Indian rupee as the Indian economic growth is falling short of expectations. Last quarter, the GDP grew at 5%, leading to a downward revision of growth for the full year.
Recently, 7% or 8% of GDP growth was regarded as the lowest accepted threshold. Anything below that was expected only amid a global crisis.
The biggest concern for the Indian economy at the moment is weakening consumer demand. Economist Abhijit Banerjee warned that household consumption has declined since PM Narendra Modi came to power five years ago — something that hasn’t happened in “many, many, many, many years.”
Raghuram Rajan, former governor of the Reserve Bank of India, said that the economic troubles are not caused by a global slowdown or rising oil price but rather because of India’s lack of reforms and internal problems.
“I think looking to the outside, to blame the outside for what’s going on is probably wrong. What’s probably a better explanation is really, this is a consequence of not having invested,” Rajan stated during a lecture.