Spring Statement causes Sterling to strengthen against the Euro (Daniel Johnson)

Hammond causes a small Sterling rally following spring Statement

UK Chancellor of the Exchequer delivered a fairly positive statement and rejected negative assessments from the Labour party. He stated that the government is making progress on making the UK economy more stable and he is confident we will see improvements.

The Office for Budget Responsibility (OBR) estimates that the UK’s financial settlement with the EU will £37.1bn. This figure is based on the phase 1 agreement during early Brexit negotiations.

The Treasury predicted it would be between £35-39bn so £37bn is certainly is not the worst news. Hammond also indicated that the economy is not in as bad a state as predicted post Brexit. This could be attributed to consumers willingness to spend and cut back on saving.

Hammond helped bolster the Pounds position by stating how he intends to decrease Britain’s current deficit. It was received with mixed views some saying is being complacent.

OBR forecasts:

• 2018 GDP 1.5% Vs 1.4%
• 2019 GDP 1.3% Vs 1.3%
• 2020 GDP 1.3% Vs 1.3%
• 2021 GDP 1.4% Vs 1.5%
• 2022 GDP 1.5% Vs 1.6%
• OBR sees continued job growth in coming years
• Budget Deficit seen at GBP 45.2 bln In 2017-2018
• UK expected to meet structural deficit target in 2021 with GBP15 bln room
• Deficit to be GBP10 Bln lower in 2018 compared with 2010

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