UK Budget statement today

Tuesday 29th November 2011
Good morning. The Pound rose slightly against the USD yesterday, but remained range-bound against the Euro as comments from Bank of England policymakers that more asset purchases may be needed to boost UK economic growth helped to curb some of sterling’s gains. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1630
• GBP/USD 1.5514
• GBP/AUD 1.5594
• GBP/NZD 2.0508
• GBP/CHF 1.4305
• GBP/CAD 1.6034
• GBP/ZAR 12.923
• GBP/JPY 120.86
• GBP/DKK 8.6499
• GBP/NOK 9.1344
• EUR/USD 1.3336

UK Budget Statement today

Chancellor George Osborne will today outline plans to boost the UK’s slow economy. This is against expected gloomy forecasts for growth, after the OECD warned yesterday that the UK was likely to slip back into recession.

They predicted a 0.03% contraction in the UK economy this quarter, and a further 0.15% the next. Bank of England governor Sir Mervyn King told MPs that growth would be flat for the next six months as the eurozone crisis threatens the UK’s recovery. This has kept Sterling in check against other currencies and has limited gains in exchange rates.

In his statement later he is expected to confirm that growth will be lower and borrowing much higher than planned. Many analysts have also warned that a nationwide strike of public sector workers scheduled for tomorrow may also sour sentiment for UK assets among foreign investors if they call into question the future success of dramatic austerity measures.

There is much negativity at the moment that could hurt the Pound, despite the EU debt crisis also weakening the Euro. Without the problems in Euro exchange rates would be significantly lower, so if you need to buy Euros consider taking advantage of the current rates, as negative sentiment today could lower exchange rates.

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Today’s Data

In addition to the budget statement, there is UK House Price data is released today, in addition to mortgage approvals and lending data. Germany has some Retail Sales figures, and the EU releases Industrial Confidence, Consumer Confidence and Economic confidence. From the USA we have consumer confidence and Housing Prices.

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