Short, sweet statement soothes Sterling
In Philip Hammond’s first Autumn Statement as UK Chancellor of the Exchequer, much hinged on what snippets about the health of the UK economy were announced. He was keen to demonstrate how the UK economy had “…confounded commentators at home and abroad…” In a remarkably short and sweet Statement, Mr Hammond committed to supporting and improving the UK economy, talking about plans to drive productivity and create “fiscal headroom” to prepare “…the economy to seize the opportunities ahead.”
“The Chancellor said that the weakness of Sterling in the face of the UK EU Referendum and political and economic activities throughout Europe and the US was cited as the main reason for having to revise the UK growth forecast down to 1.4%, from 2.1%. However, several positive announcements helped the Pound to strengthen slightly against the Euro and US Dollar,” says David Johnson, Director at Halo Financial (www.halofinancial.com).
“We saw similar small changes in the exchange rates for other currencies, which is likely from the announcement that, despite the downgraded UK growth forecast, it is still a figure similar to that of Germany’s and higher than predicted figures for France and Italy, all countries with their own important upcoming political and economic events with which to deal.”
“Philip Hammond will have been pleased to announce that the Government will not be seeking a surplus in 2019-2020 – this bodes well for both the UK economy and the country’s currency. Positive labour data, shining the spotlight on improved employment figures – not just in the South East, as we may have come to expect, but particularly in the North East, Northern Ireland and the Midlands – emphasized the business opportunities in other key regions of the UK outside London and also helped lift Sterling.”