By Ashley Finill
The UK budget was delivered in the house of Commons by the Chancellor Rishi Sunak on Wednesday afternoon. There were no real surprises as information had been leaked in the press prior to the announcements. The NHS have been handed a £5.9 Billion funding to clear the backlog caused by the Coronavirus outbreak, the minimum wage has been risen by 6.6% to £9.50 an hour and a boost in universal credit. Rishi Sunak also believes that inflation could come back down to pre pandemic levels within a year.
ECB interest rate
Yesterday afternoon the European Central Bank president Christine Lagarde played down the chance of a rate hike in 2022. The central bank for the Eurozone kept interest rates and its monetary policy stance unchanged, this is even with ongoing inflationary pressures. However, some market analysts believe this may be the ECB underestimating current pressure and is likely to announce a rate later next year. Although a hike is not imminent or at least talk of one the Euro still gained over half a cent on the Pound in the afternoon’s trading, reversing the pounds gains clawed back overnight on Thursday. Should the ECB raise interest rates next year this could hinder a recovery for Sterling seen over the past couple of months.
As the month draws to an end there is little data out however there is a release from the Eurozone in the morning. At 10am CPI and GDP will be posted, CPI is expected to remain at the same figure as last month of 1.9 and GFP is also expected to contract from last month.