ETF Securities Research Blog

GBP to gain after the UK election

We expect that the British Pound will gain after a period of consolidation around current levels ahead of the UK election next week. The latest polling indicates that Prime Minister May’s lead has declined, prompting a modest pullback in the local currency. We expect that although GBP could soften further in the coming week, as the Conservative party’s lead see-saws, but believe it will stay above key support of 200-dma, which is currently 1.2595.

Read more…

Brexit blows the UK Budget

The UK Treasury is set to miss its budget target again in 2016/17 and has no intention to return the budget to balance during this parliament. Although fiscal deficit is expected to jump to £59bn (from £39bn in March) in 2017/18, it’s a good sign that the Government is trying to offset the negative impact of Brexit and not leave monetary policy to do all the heavy lifting. Chancellor Hammond will borrow around 2.5% of GDP more than was the objective in March over the next five years. Read more…