With the US dollar prevailing in the New York market, UK fiscal policy drew a calm reaction, but uncertainty remains ahead over securing funding and the direction of tax policy. GBP/USD traded around 1.3457, GBP/JPY at ¥213.28 and EUR/GBP around 0.8562.
The US dollar was prevailing in today's foreign exchange market, while sterling was searching for direction. The market appears reassured by the new administration's fiscal management, but views remain that uncertainty persists ahead over securing funding and the possibility of tax changes in the autumn Budget.
With Healey appointed Chancellor of the Exchequer under UK Prime Minister Burnham, and a policy of maintaining fiscal discipline set out, some reassurance has spread through the market. However, although modest tax cuts were announced, it remains unclear how the funding will be secured and what additional fiscal measures may follow.
The UK government cut business rates for pubs, clubs and live music venues, while abolishing VAT on electricity bills. This provided guidance on fiscal support for certain industries, but uncertainty remains over the overall funding structure and the direction of the tax burden going forward.
The main market exchange-rate levels reported were GBP/USD around 1.3457, GBP/JPY at 213.28 and EUR/GBP around 0.8562.
The MINKABU PRESS editorial team is closely monitoring these developments.