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UK investors will be hoping the stock market can catch some of the optimism of further lockdown easing as the week gets underway.

After global shares struggled last week, albeit with a positive spurt on Friday that helped recoup some of the losses, trading this morning has been cautious with the FTSE 100 beginning positively but later falling back to sit 0.3% lower by 10am.

Today is the day that UK restrictions on meeting indoors, eating and drinking inside hostelries and hugging those from other households are lifted, raising hopes that the already recovering British economy can step up another gear. But in case we needed reminding that the pandemic may not be through with us just yet there were also signs today that a full return to normality is a way off.

Comments from Government ministers that travel to countries on its so-called ‘amber’ list - including France and Spain - should be avoided has knocked airline and travel stocks, with IAG, parent of British Airways, and easyJet among the biggest fallers today, down 1.5% and 1.8% respectively.

Also suffering were companies in the hospitality sector, with Whitbread, Mitchells & Butlers and The Restaurant Group all falling more that 1.5%. The emergence of a potentially more contagious (although not more deadly) ‘Indian’ variant of the Covid-19 virus has raised fears that further reopening of the economy will have to be delayed.

One company expected to enjoy a better week is Royal Mail, which reports full-year results on Thursday. All those extra parcels in lockdown are expected to help the company double its profits to £700m.

Economic news due for release this week will tell us more about the state of the UK economy. Labour market data is due on Tuesday with the ONS data expected to confirm a better picture for jobs. Separately, the Bank of England recently cut its forecast for peak unemployment in the wake of the pandemic to 5.5%, compared to the latest reading of 4.9% for February, while the Chartered Institute of Personnel and Development (CIPD) release commentary today highlighting that that employment intentions among employers are stronger than at any time since the February 2013.

Meanwhile, inflation data will arrive on Wednesday with the market keenly watching for signs that Brits are spending the huge sums they have saved curing lockdown. It’s estimated that UK households have squirrelled away some £100bn since February last year and the release of that money as restrictions are lifted is likely to flow through to higher prices. The first signs of that could arrive this week.

Finally, Friday will bring retails sales data to show the effects of lockdown easing so far. It’s been five weeks since the first lifting of restrictions in April the new figures will be watched closely for indications of consumer demand.

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

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