Britain Is in Severe Economic Shrinkage

UK‘s Office of Budget Responsibility(OBR) estimates that due to government’s lockdown measures, the country‘s economy will see an overall 13% shrinkage in 2020 which hasn’t been seen in over 300 years, while government borrowing may hit the highest level since the second world war.

Economy may shrink as much as 35% from April to June and unemployment rate may more than double to reach 10%. The economy may expect a rebound later this year once the restrictions over social activities in order to contain coronavirus are lifted. In addition, IMF forecast a 6.5% drop in Britains output in 2020.

Meanwhile, Britains 2020-2021 annual budget deficit will almost quintuple to 273 billion, or 14% of GDP, which is greater than the 10% of GDP deficit after the global financial crisis.

GBP/USD daily pivot points: 1.2527--1.2533

S1: 1.2430 R1: 1.2625

S2: 1.2335 R2: 1.2725