The Pound Sterling fell against the US Dollar, dipping to a 7-week trough as investors await the release of the British budget. The finance minister is expected to raise his economic forecasts, but analysts believe that Philip Hammond is also likely to talk up new targets that would curb the UK’s large fiscal deficit. Included in his plan is also likely to be proposals for taxes and spending. Among the G7, the UK has the second fastest growing economy, driven largely by consumer spending.
As reported at 10:22 am (GMT) in London, the GBP/USD was trading 0.34% lower at $1.2161; the pair earlier hit a trough of $1.2159 while the peak was at $1.2214. The EUR/GBP was trading at 0.868 Pence, a gain of 0.29%; the pair’s daily trading range is currently at 0.8652 Pence at the low and 0.8681 Pence at the high.
UK Consumer Spending Shows Signs of Strain
The latest figures economic figures from the UK show consumer spending lagging amid higher inflation, attributed generally to the Pound’s decline. In the past two weeks, the Pound has lost nearly 2.5% of its value versus the US Dollar. Analysts say that Hammond has hinted that he intends to save the “windfall” which might be needed during the Brexit negotiations. Analysts say that fiscal tightening is likely to keep the Pound under sell pressure.