Next week ...
A double-Budget year
The UK Budget takes place on Wednesday 8th March at 1230 GMT. Although this will be a “full” Budget, it will be the last Spring Budget. Chancellor Phillip Hammond announced back in December that the main Budget would shift to the autumn from 2017, which means that this year we will get two budgets. This doesn’t mean that Wednesday’s Budget is not important, however, it does suggest that the measures announced in this last Spring Budget could be fairly short-term in nature, with the Chancellor giving himself plenty of wiggle room in case Brexit negotiations cause the economy to turn south in the second half of this year.
Fresh lows for GBP on the cards?
Thus, the chief takeaway from this Budget could be how different our fiscal plans are to those in the US. The US markets and the dollar have rallied strongly on the back of hopes for a tax cut and big spending plan under the Trump administration, the UK government has very different ideas. If this contrast becomes stark on Wednesday, then it may trigger a sell-off in the pound, and 1.20 once again looks possible in GBP/USD. A break below here opens the way to 1.1840 – the low from last year’s flash crash.
A double-Budget year
The UK Budget takes place on Wednesday 8th March at 1230 GMT. Although this will be a “full” Budget, it will be the last Spring Budget. Chancellor Phillip Hammond announced back in December that the main Budget would shift to the autumn from 2017, which means that this year we will get two budgets. This doesn’t mean that Wednesday’s Budget is not important, however, it does suggest that the measures announced in this last Spring Budget could be fairly short-term in nature, with the Chancellor giving himself plenty of wiggle room in case Brexit negotiations cause the economy to turn south in the second half of this year.
Fresh lows for GBP on the cards?
Thus, the chief takeaway from this Budget could be how different our fiscal plans are to those in the US. The US markets and the dollar have rallied strongly on the back of hopes for a tax cut and big spending plan under the Trump administration, the UK government has very different ideas. If this contrast becomes stark on Wednesday, then it may trigger a sell-off in the pound, and 1.20 once again looks possible in GBP/USD. A break below here opens the way to 1.1840 – the low from last year’s flash crash.
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