Yesterday we did see a modest recovery for GBP to the EUR after Bank of England’s interest rate meeting. The banks spokesmen stated that ‘‘there was no presumption that monetary policy was on a pre-set path over the next few meetings’’. This has lowered forecasts for a rate cut in May. The forward guidance now for 2025, is that Bank of England is expected to bring the interest rate down to a base level of 4%. This would require two more cuts of 25 basis points, which might suggest happening later in the year.
Ahead of UK’s spring budget, we did see public net borrowing being released this morning. It did overshoot the governments expectations by a mile, coming in at £-10.71B compared to its forecast of £-6.6B. Noticing that the government’s spending compared to what it’s currently bringing in – creating a larger negative gap. The office for budget responsibilities mentioned that social benefits and investment spending was much larger than the anticipated and cause the changes in net borrowing. This is causing more headache for the government ahead of their budget release next Wednesday.
GBP/EUR 1.1935 GBP/USD 1.2929 GBP/AED 4.7508
GBP/AUD 2.0561 GBP/CHF 1.1419 GBP/CAD 1.8535
GBP/NZD 2.2459 EUR/USD 1.0821 GBP/ZAR 23.5721