Pound under pressure after England's lockdown extension

The pound weakened against the euro and dollar on Thursday, following confirmation that England’s current lockdown will persist for at least another five weeks.

At a Downing Street press conference on Wednesday evening, UK prime minister Boris Johnson said schools would remain shut until at least 8 March. He promised to set out a fuller plan for unlocking the economy towards the end of February.

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While ministers had suggested restrictions could remain in place until March, the confirmation is a blow for the economy. Non-essential retail is not expected to reopen until at least April while pubs and restaurants could be shut until May, according to the Telegraph.

Sterling was down 0.2% against the euro in early trade on Thursday to reach €1.1272 (GBPEUR=X). Despite the dip, the pound remained close to 2021 highs against the pairing.

The pound was down 0.4% against the dollar to $1.3637 (GBPUSD=X).

Daniel Noonan, an economist with AIB, said there was a “risk-off tone” that was supportive of the dollar.

The FTSE 100 (^FTSE) was down more than 1% amid a wider global sell-off for equities.

WATCH: Schools won’t reopen till March