In the UK yesterday economists warned of a "sluggish" recovery in the economy this year, ahead of tomorrow's Budget. The Confederation of British Industry said it expected the economy to grow by 1% in 2010, with the recovery remaining subdued until the middle of next year. The government forecasts growth of 1.25% this year and 3.5% for 2011. However the Chancellor, Alistair Darling, may revise those predictions in the Budget tomorrow.
After the report was released the Pound weakened further against both the US Dollar and the Euro, it closed trading down 0.36% against the Euro at EUR 0.8978.
British Consumer Price Index data is due to be released later today. Governor King from the Bank of England said yesterday that first quarter inflation was likely to be in line with the Banks forecast of 3.1%
Chancellor Alaistair Darling has reiterated there will be "no giveaways" ahead of the general election. The budget is expected to focus on encouraging private sector investment and securing long term economic growth. The government plans to halve the budget deficit - which is one of the highest in Europe and is expected to hit about 12.6% of GDP this financial year, well above the European Union threshold of 3% - over the next four years.
The Pound has had its worst annual start in the forex trading market in 13 years, dropping 7% against the US Dollar since January. The currency has been weakened by uncertainty regarding the outcome of the general election which Prime Minister Gordon Brown must call by June. The government was forced to borrow heavily during the recession resulting in one of the highest deficits in Europe. Mr. Darling has said that while there had been signs recently that the economy was improving, with unemployment falling and government borrowing lower than forecast there was still a lot of uncertainty.
He said “the mood of the times is not for giveaways. People are not daft, they know perfectly well we need to get borrowing down and secure (economic) recovery”.
The uncertainty about who will win the election and whether there will be a hung parliament has resulted in a bearish trend in Sterling. A minority government is looking increasingly probable according to recent UK opinion polls and sentiments are sharply divided between the Labor and Conservative parties on how to achieve the necessary spending cuts.
Elsewhere the Canadian Dollar fell for a third day, the longest losing streak since January as crude oil prices continued to fall. The loonie rose in 12 of the last 16 sessions to reach C$1.0062 last week, the closest to parity with the U.S. dollar since 2008. It has risen 3% this month for the second best performance among the 16 most traded counterparts against the US Dollar. South Africa’s Rand which also relies on commodities for export revenue preformed best.
After the report was released the Pound weakened further against both the US Dollar and the Euro, it closed trading down 0.36% against the Euro at EUR 0.8978.
British Consumer Price Index data is due to be released later today. Governor King from the Bank of England said yesterday that first quarter inflation was likely to be in line with the Banks forecast of 3.1%
Chancellor Alaistair Darling has reiterated there will be "no giveaways" ahead of the general election. The budget is expected to focus on encouraging private sector investment and securing long term economic growth. The government plans to halve the budget deficit - which is one of the highest in Europe and is expected to hit about 12.6% of GDP this financial year, well above the European Union threshold of 3% - over the next four years.
The Pound has had its worst annual start in the forex trading market in 13 years, dropping 7% against the US Dollar since January. The currency has been weakened by uncertainty regarding the outcome of the general election which Prime Minister Gordon Brown must call by June. The government was forced to borrow heavily during the recession resulting in one of the highest deficits in Europe. Mr. Darling has said that while there had been signs recently that the economy was improving, with unemployment falling and government borrowing lower than forecast there was still a lot of uncertainty.
He said “the mood of the times is not for giveaways. People are not daft, they know perfectly well we need to get borrowing down and secure (economic) recovery”.
The uncertainty about who will win the election and whether there will be a hung parliament has resulted in a bearish trend in Sterling. A minority government is looking increasingly probable according to recent UK opinion polls and sentiments are sharply divided between the Labor and Conservative parties on how to achieve the necessary spending cuts.
Elsewhere the Canadian Dollar fell for a third day, the longest losing streak since January as crude oil prices continued to fall. The loonie rose in 12 of the last 16 sessions to reach C$1.0062 last week, the closest to parity with the U.S. dollar since 2008. It has risen 3% this month for the second best performance among the 16 most traded counterparts against the US Dollar. South Africa’s Rand which also relies on commodities for export revenue preformed best.