Wednesday’s Spending Assessment should not be an enormous second for monetary markets, ING’s FX analyst Francesco Pesole notes.
Tax rises loom in autumn finances
“We already know the way shortly funding and departmental budgets will rise over the following few years, and at present’s announcement merely tells us how the general pot will get divvied up. However it should emphasise that in terms of day-to-day spending, there’s not sufficient money to go round, and extra money will must be discovered on the Autumn Price range.”
“Added to which, we expect the Treasury’s slim fiscal headroom towards its fiscal guidelines has absolutely evaporated and tax rises can be wanted later this 12 months to plug the hole.”
“The GBP misplaced some steam after tender UK jobs information yesterday. Price range occasions typically stir gilt market volatility, so EUR/GBP would possibly get a little bit of bullish momentum and check 0.850 within the coming days.”
