Morning Update – Boring Budget

Morning all

We will just focus on the budget for today; albeit it was an hour of sheer boredom last night! Instead of focusing on the national benefits which you can read on all mainstream news providers we are going to focus on the international impact it could have on you. However this budget really does hinge on us coming to an agreement with the EU or this could be worthless come March!

After a decade of cuts to public services, Hammond offered a glimpse of higher spending. But he made clear that more spending will hinge on London getting a Brexit agreement with Brussels, putting pressure on rebels in the ruling Conservative Party to back PM Theresa May.

Our attention is now to the Bank of England’s monetary policy meeting on Thursday, where the central bank is expected to keep interest rates on hold but detail the conditions necessary for policy tightening. Were it not for Brexit, the BoE on Thursday would probably be providing guidance on a rate hike, possibly in February given compelling evidence of rising wage growth.

As the year is drawing to a close this really could spell the end of the green patch we’ve seen for GBP. After comparing notes with other brokers in the industry it really is time to start looking at forward cover through March. Whilst we are 1.5% off the highs we’ve seen last week, we are through some key psychological levels on GBPEUR, GBPUSD with a clean drop of a further 2% until the next level lower.

Don’t kick the can down the road, feel free to get in contact for a further chat.