GBP/INR is extending the downtrend that started yesterday, even though the pair seemed to continue the bullish mood on Monday morning. At the time of writing, one British pound buys 93.976 Indian rupees, down 0.32% as of 6:50 AM UTC. Yesterday, the pair fell almost 0.90%.
The sterling is under increased pressure as the number of new coronavirus cases is accelerating again in the UK and Europe, prompting discussions of another national lockdown in Britain. Later today, Prime Minister Boris Johnson will announce new restriction measures. Still, he doesn’t endorse a strict lockdown given the negative impact on the economy.
Johnson is about to impose new restrictions on restaurants and bars. They will have to close by 10 PM and will be limited to table service only.
The PM will meet with officials and leaders of Scotland, Wales, and Northern Ireland before informing the Parliament about further restrictions.
Johnson’s office was quoted as saying:
“No-one underestimates the challenges the new measures will pose to many individuals and businesses. We know this won’t be easy, but we must take further action to control the resurgence in cases of the virus and protect the NHS.”
Even before the resurgence of COVID, British consumers’ confidence about their finances maintained at a low level in September. The IHS Markit Household Finance Index remained at 40.8 in the current month. It used to hover around 44 in 2019.
Worries related to jobs increased for the first time since the lockdown was imposed in March. The government support scheme is about to end in October.
IHS Markit economist Lewis Cooper commented:
“September data also signalled reductions in household spending, savings and cash availability, all of which highlight the crunch on finances at present.”
India’s Economic Recovery is Accelerating
In India, the economic recovery seems to be gaining pace. Brokerage giant Nomura said that its India Business Resumption Index (NIBRI) increased to 82.3 for the week ending September 20 from 81.2 recorded in the previous week. It was the second straight week of a new post-lockdown peak. The indicator might suggest that the lockdown fatigue is causing consumers to ignore the pandemic and return to their activities. The NIBRI tracks business activity through high frequency indicators, including mobility, power consumption and employment.