“The financial markets have largely welcomed Chancellor Sunak’s speech, sparking a short surge in trading activity. However, this will likely be short lived, and I anticipate a general retreat to safe haven assets and cash savings as investors look to hedge against market uncertainty.
In the coming weeks, I expect to see a weakening pound on ongoing Brexit risks and rising demand for gold once the recent bout of US dollar strength subsides.
“Today’s announcement also shows the government is in a precarious position. Rather than focus on the long-term, it is clearly fire-fighting the immediate dangers of the crisis. Importantly there is no telling what else will be required to bring about a post-pandemic recovery if COVID cases do not drop. Just how deep are the treasury’s coffers? Can any more relief be offered? Will an effective vaccine be released before the end of the year? Only time will tell.