GBP/INR has managed to break above a sideways channel, but now it faces another strong resistance near 94.000. Currently, one British pound buys 94.130 Indian rupees, up 0.35% as of 5:05 AM UTC. The pair is bullish for the third consecutive session. It has recovered most of the losses incurred at the beginning of the month.
The rupee still can’t oppose resistance as the number of coronavirus cases continues to climb in India, whose economy was already struggling before the pandemic.
UK Finance Minister to Announce Next Moves of Recovery Plan
On the other side, the UK is comfortably relaxing restrictive measures step-by-step. Still, it has to address the challenges of a potential second-wave of pandemic and an increase in unemployment. UK finance minister Rishi Sunak is about to announce the mini-Budget 2020 later today. He will also reveal the next steps of the COVID recovery plan.
Sunak will announce a new 2 billion pound scheme to fix youth unemployment. The Kickstart Scheme will allow companies to hire people aged 16-24 by benefiting from government funds to pay them the minimum wage for 25 hours a week. The finance minister said:
“Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic. We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation.”
It is estimated that the plan could maintain 300,000 young people into work.
Sunak may also announce the cut to value-added tax to help restaurants, pubs and other hospitality businesses whose revenue suffers from social distancing rules.
Another cut for property purchases taxes may also be announced, as the finance minister is eager to boost the housing market. Yesterday, mortgage lender Halifax said that British house prices declined for a fourth consecutive month. This is the longest period since 2010.
In India, rating agencies add salt to the injury by releasing gloomy predictions for the country’s gross domestic product (GDP) performance. Banking group DBS said that India’s economy would show a double-digit contraction in the three months to June.
