New Lockdown Measures Shrink UK’s Economy
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<p><span data-contrast="auto">In November, business activity in UK has contracted due to a new wave of coronavirus that affected the huge services industry, but news of possible vaccines in early 2021 boosted hopes of businesses in UK as shown on a survey on Monday.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">The HIS Markit/CIPS UK Composite Purchasing Manager’s Index (PMI), fell to a 5-month low of 47.4 in November 52.1 in October.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">It is the first time the index has fallen below the 50.0 growth threshold level since June.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">The decline was smaller than a slump to 42.5 forecast in a Reuters poll of economists, however, and less</span><span data-contrast="auto"> severe than the drop in the eurozone.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">The progress of the vaccines boosted the component of the PMI that hit its highest in more than five years.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">On Monday, Bank of England Chief Economist Andy Haldane said he hoped the economy to “turn a leaf” next year, but warned of an inevitable long-term damage.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">After Prime Minister Boris Johnson imposed the 4-week lockdown, Britain’s economy is widely expected to contract in the fourth quarter.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">Restrictions in other parts of United Kingdom are also imposed in sectors of hospitality and indoor activities.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">Those closures helped to push the services PMI to 45.8 from 51.4 in October.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">But manufacturing, which was largely unaffected by the la</span><span data-contrast="auto">test lockdown, accelerated, with its PMI rising to 55.2, the joint-highest level since 2018.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">“The two-speed nature of the recovery is increasingly clear,” J.P. Morgan Asset Management strategist Hugh </span><span data-contrast="auto">Gimber</span><span data-contrast="auto"> said. “The manufacturing sector continues to tick along at a healthy pace, while new lockdowns have slammed the brakes on the nascent recovery in the service sector.”</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
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<p><b><span data-contrast="auto">Technical Outlook</span></b><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"><img class="alignnone wp-image-22192" src="https://www.learntotrade.co.uk/assets/uploads/2020/11/nladmkla-300×158.png" alt="" width="488" height="257" srcset="https://www.learntotrade.co.uk/assets/uploads/2020/11/nladmkla-300×158.png 300w, https://www.learntotrade.co.uk/assets/uploads/2020/11/nladmkla-768×405.png 768w, https://www.learntotrade.co.uk/assets/uploads/2020/11/nladmkla.png 1024w" sizes="(max-width: 488px) 100vw, 488px" /> </span></p>
<p><span data-contrast="auto">In the daily charts of GBP/USD, the pair edged higher early Wednesday morning in Asia session.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">As what we can see in the chart, the pair is still being support by the resistance level at 1.31776. Due to the weakening of the dollar and the optimism in the COVID-19 vaccine and Brexit deals, we may expect the sterling to test the resistance level at 1.34766 in the coming days. Possible breakout from this resistance level will record a new high from the sterling for the year.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">However, if the price will fall from, we may expect the pair the re-test the support level at 1.31776 before falling further.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
<p><span data-contrast="auto">If the price will break down from the support level at 1.31776. we may expect the pair to fall further and test the support level at 1.26885.</span><span data-ccp-props="{"201341983":0,"335551550":6,"335551620":6,"335559739":0,"335559740":240}"> </span></p>
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<p>The post <a rel="nofollow" href="https://www.learntotrade.co.uk/new-lockdown-measures-shrink-uks-economy/">New Lockdown Measures Shrink UK’s Economy </a> appeared first on <a rel="nofollow" href="https://www.learntotrade.co.uk">LEARN TO TRADE</a>.</p>
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