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Bank of England cuts interest rates, Spring Budget ahead

business-articlesBank of England cuts interest rates, Spring Budget ahead
  • BoE slashes interest rates
  • Spring Budget ahead
  • Euro pressured by Italy lockdown
Rishi Sunak’s Spring Budget in focus

The Bank of England (BoE) became the latest central bank to cut rates this morning, delivering a surprise 50 basis point cut just hours before the UK’s budget.

Later today Chancellor Rishi Sunak will announce what has been deemed the ‘coronavirus Budget’ as the Treasury seeks to support the economy through the coronavirus crisis.

GBP investors are hoping the Chancellor will announce a big increase in spending today, with traders likely to be comforted by the apparent coordination between the BoE and Treasury to shore up economic growth.
Disappointing UK economic growth to weigh on the pound

Trade in the euro was mixed yesterday, with investors spooked by the Italian government’s move to quarantine the entire country.

While this sparked concerns about Italy’s economic outlook, investors welcomed comments from Germany’s Economy Minister Peter Altmaier regarding his government’s plans for billions of euros worth of stimulus.

Further EUR movement is likely to be limited ahead of tomorrow’s European Central Bank (ECB) policy decision.
US inflation ahead

The US dollar rebounded on Tuesday, driven higher by optimism over Donald Trump’s proposals for an economic stimulus package.

Today domestic inflation figures will be in focus for USD investors.

However, an uptick in consumer price pressures might have little impact on USD given that the Federal Reserve is already expected to cut interest rates to near zero.

Upcoming Data:
Wednesday 11th March

09:30    GBP GDP (January)
09:30    GBP Industrial Production (January)
09:30    GBP Manufacturing Production
12:30    GBP Spring Budget 2020
12:30    USD Inflation Rate (February)

Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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