Ahead of the UK autumn budget that will be released in the end of this month – we saw public net borrowing sweep past official forecasts. Borrowing rose to 16.6billion in the last month, an increase of 2.1billion year-on-year. To put this in perspective, it’s the third highest figure recorded in September since public sector net borrowing began being documented. ONS officials outlined increased spending being the main driver and net borrowing increased because of higher interest rates and wage growth.
IMF (International Monetary Fund) are meeting this week and the main topic to be discussed is economic growth across world economies. Overall, we have seen a decrease worldwide when it comes to the economic growth, heading towards a slow to medium comeback with difficulties in China and Europe. As we know, ECB already lowered their borrowing costs last week to tackle issues regarding Germany’s manufacturing problems and France fiscal difficulties after the election. Further concerns raised from the IMF of a slowdown in Europe could lead to further EUR weakness as speculations might be drawn to further actions taken by the ECB to balance its economy.
While talking on the topic of interest rates cuts, BoC (Bank of Canada) are holding their interest rate decision tomorrow and are currently expected to lower their base rate by 50 basis points down to 3.75%. It would a second consecutive cut from BoC as they cut in September by 25 basis points, seeing CAD take a tumble.
GBP/EUR 1.1985 GBP/USD 1.2980 GBP/AED 4.7704
GBP/AUD 1.9439 GBP/CHF1.1232 GBP/CAD 1.7959
GBP/NZD 2.1460 EUR/USD1.0816 GBP/ZAR 22.8141