30/10/2018 - Final UK Budget Before Brexit

GBP

The Pound was under pressure yesterday despite chancellor Philip Hammond delivering what he called a budget for Britain’s future and revising up the UKs weak growth forecasts from 1.3% to 1.6%.

Hammond described the UK’s era of austerity as coming to an end as he confirmed an additional £20.5 billion for the NHS, £1 billion on defence and £500 million set aside to prepare for a no-deal Brexit. In Hammond's third budget he said wage growth is at its highest in nearly a decade and 3.3 million more people in work since 2010.

EUR

Yesterday afternoon saw Germany's Angela Merkel announce that she will step down as chancellor in 2021, following recent election setbacks.

She also said she would not seek re-election as leader of the centre-right Christian Democratic Union (CDU) party in December, a post she has held since 2000. CDU was severely weakened in Sunday's poll in the state of Hesse, the latest in a series of setbacks. Parties like the left-leaning Greens and the far-right, anti-immigration AfD have grown in national support following the 2017 general election, as backing for the major centre parties has waned.

Economists expect Germany's influence on Brexit negotiations to wain further after Merkel’s decision. Germany, widely considered the beating heart of the EU, is so often the first to make a point at the Brussels negotiating table however many believe the news will be a distraction at the Brexit negotiating table.

Key Announcements

15:00 - USD: CB Consumer Confidence; Forecast at 136.3 against previous of 138.4