Fighter: 2 (Sterling Falls)

Product Information

The British Pound's strong run could be faded in the wake of today's Bank of England policy decision as risks are skewed to the downside. There’s more from Vladimir Putin. The Russian president has threatened to cut off energy supplies to the west if price caps are imposed on Russian oil and gas exports, saying that the west would be “frozen” like a wolf’s tail in a famous Russian fairy tale, Reuters reports. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.

Hunt’s budget is a lot more fiscally responsible and still managed to cut employee national insurance from 12% to 10%, which is the main talking point. As per the Treasury statement: Sales were expected to rise by 0.3% month-on-month in October, recovering from September's downwardly revised -1.1%, but came in at -0.3%.Russia is the world’s second-biggest oil exporter after Saudi Arabia, and the world’s top natural gas and wheat exporter. Europe usually gets 40% of its gas and 30% of its oil from Russia.

As the chart below shows, 71% of revenues generated by FTSE 100 companies come from outside the UK. The strength of sterling against the euro is also important given the large chunks of revenue accounted for by France, Germany, Italy and other eurozone countries.

UK’s Autumn Budget Delivers Tax Cuts and Avoids the Debacle of 2022. Sterling Slightly Lower on OBS Downgrades to Growth and Employment

British expats will also suffer from a weaker pound. The hundreds of thousands of Britons living in Spain and France who depend on salaries or pensions paid in sterling will see their purchasing power fall in their adopted nations. How does a weaker pound affect businesses? The Pound to Euro exchange rate dropped in the wake of the data release to 1.1418, the Pound to Dollar exchange rate slid to 1.2318."Sterling slips through 1.24 after weak retail sales across the board," says Justin McQueen, a Reuters market analyst. "First BoE rate cut remains priced as a 50/50 call in May 2024." The US dollar is broadly higher following a lower-than-expected reading on Unemployment Claims. This has pushed EURUSD lower to 1.087 from a Tuesday high of 1.096. GBPUSD is also lower and showing relative weakness compared to other G7 currencies following the Chancellor’s budget statement. EURGBP is 0.15% higher at 0.8715. The vote is likely 6/3 for 25/0, with Cunliffe joining Dhingra and Tenreyro in voting for a hold. Inflation projections will probably be tweaked slightly, though this should have limited policy implications given the substantial uncertainty bands around the projections," he adds.

The chancellor updated the governor on his growth and fiscal strategies, noting that reforms which create the conditions for a high-growth economy can help to alleviate inflationary pressures. He outlined the government’s plans to act this week in response to high energy prices, and reiterated that such action requires fiscal loosening in the short-term. The chancellor confirmed that over the medium-term, the government is committed to seeing debt falling.Above: Market expectations for the outlook for the Bank of England's Bank Rate. Image courtesy of Goldman Sachs. He said Russia would have not problems redirecting its gas exports to other countries, such as China.

Andrew Bailey, governor of the Bank of England, and some of his senior team are being quizzed by the Commons Treasury committee. Change the plan you will roll onto at any time during your trial by visiting the “Settings & Account” section. What happens at the end of my trial? Nothing yet. But there have been warnings the UK could be downgraded in the event of a vote to leave the EU. TD Securities says another upside surprise would involve a change to the Bank's guidance, specifically if the Monetary Policy Committee reintroduces the guidance that it expects "further increases in Bank Rate" will be required if the economy evolves as expected. Investors are also concerned that extra borrowing will not be recouped through higher growth and improved tax receipts, leaving the UK with worsening debts over the long term.The message was another attempt by Bailey to resist the market's urge to bring forward rate cut expectations, a development that has been weighing on the Pound since August. The prime minister and I are committed to taking decisive action to help the British people now, while pursuing an unashamedly pro-growth agenda. In a research note entitled “You ain’t seen nothing yet”, the bank comments: “The role of Brexit in steering recent pound price action can be likened to a rollercoaster warming up with some small twists and turns before an inevitable sharp drop.”