UK: A moderately-sized tax relief package can give some support to GBP this week – ING
Source Fxstreet
This could be an important week for UK markets. Economists at ING analyze Pound Sterling (GBP) outlook ahead of the Spring Budget.
UK budget is a key event risk for Sterling
Hopes of delivering pre-election tax cuts are likely to be met by funding constraints, even though we estimate the headroom has increased from £13bn to £18bn thanks to slightly lower market rates compared to November’s Autumn Statement.
UK media have reported Hunt is probably scaling back the size of the tax relief package and that support measures will also be smaller than in November.
A moderately-sized tax relief package (i.e., one that does not trigger gilts turmoil) can probably give some support to GBP this week, but the spectrum of possibilities is admittedly quite wide.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
The US Federal Reserve is expected to cut the policy rate for the first time in 2025.
The Bank of Canada (BoC) is widely anticipated to reduce its benchmark interest rate by a quarter percentage point on Wednesday, taking it to 2.50% after three consecutive ‘on hold’ decisions.
The risk rally on global indices takes a breather amid a typical market caution heading into the key central bank event risks, with the US Federal Reserve (Fed) policy announcements eagerly awaited.
The Pound Sterling (GBP) faces selling pressure against its major peers on Wednesday after the release of the United Kingdom (UK) Consumer Price Index (CPI) data for August.
The dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
Related Instrument
