GBP/INR is in a bearish mood in early trading on Wednesday, but it managed to secure a 0.88% gain yesterday. Currently, one British pound buys 93.561 Indian rupees, down 0.11% as of 6:50 AM UTC. Yesterday, the pair started the session with a similar decline but then surged after UK Prime Minister Boris Johnson presented his “new deal” to help the economy recover after the pandemic.
On Tuesday, the British PM set out his recovery plan in a speech in Dudley, in the West Midlands. Johnson pledged to spend 5 billion pounds to invest in infrastructure and building homes. The plans previously stipulated in the Tory election manifesto would be intensified, he said.
On the other side, Labour leaders argued that the PM wasn’t paying enough attention to saving jobs.
Finance Minister Rishi Sunak announced later during the day that he would come up with an economic update next week to set out “the next stage in our plan to secure the recovery.”
Johnson’s “new deal” comes amid the worst recession in centuries, as Britain was hit by the coronavirus pandemic. The PM pledged to “build, build, build” in an effort to speed up recovery. He said:
“We cannot continue simply to be prisoners of the crisis. We must work fast because we’ve already seen the vertiginous drop in GDP and we know that people are worried now about their jobs and their businesses.”
The 5 billion pound investment plan comprises the following projects:
- 5 billion pounds for hospital building and maintenance.
- 100 million pounds for about 30 road projects.
- More than 1 billion pounds for building schools.
- 12 billion pounds to build 180,000 new homes in the next eight years – this project combines three pots of money that have been already announced by Johnson’s administration.
GBP/INR Loses Momentum
Investors reacted positively on the news. Yet, the GBP/INR lost momentum as some commentators suggested that there was nothing new in the “new deal.”
Meanwhile, UK house prices declined in annual terms for the first time in eight years in June. Mortgage lender Nationwide said earlier today that its house prices index dropped by 0.1% compared to June 2019 and fell 1.4% from May. Analysts polled by Reuters expected an annual increase of 1% and a monthly decline of 0.7%.
