UK Budget 2020
11 March, 2020
So far this week we have seen the Pound sitting at the lower end of its recent trading range with increasing fears it could weaken further amidst the growing concerns over coronavirus, the potential of more economic slowdown and the ongoing trade negotiations with the EU. All areas point to more added pressure on our currency.
This morning the Bank of England announced an emergency cut in interest rates in a measure to aid the economy during this coronavirus outbreak. Cutting the rate by 50bp from 0.75% to 0.25%, putting the borrowing costs down to the lowest level in history. Allowing the bank to free up some funds to provide some lending relief for businesses. Sterling lost a cent against its major counterparts as the news hit this morning but has since recovered back to where it sat ahead of the news.
Today the Budget for 2020 will be delivered by the new Chancellor Rishi Sunak. Having had just four weeks to prepare following Sajid Javid’s surprise resignation during the Prime Ministers cabinet reshuffle the budget is due around midday. The budget presents the government’s economic forecast for the next year, containing estimates on economic growth, spending and borrowing forecasts and fiscal stimulus. Given the ongoing global worry of coronavirus, there is no doubt investors will be watching a listening for any expected changes and more importantly any unexpected ones.
Ahead of the budget, the UK is also due to post several economic data releases. At 09:30 we have MoM and YoY figures Manufacturing Production which is expected to retract from 0.3% to 0.2% while Industrial Production figures are expected to improve by 0.2% from its previous reading. The latest GDP figure is also due at 09:30 also showing a potential retraction of 0.1%. Then early afternoon the US post-Consumer Price Index Excluding Food & Energy at 12:30. The day ahead could see some movement on the currency markets so be sure to stay in touch with your contact here at Currency Index to be kept updated.
If you have an upcoming currency requirement or even a requirement that may seem like a little way off, don’t put off getting in touch. An initial conversation about the various options we provide could help you mitigate your risk, and save you a fair amount of money in the long run.
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