Yesterday afternoon all eyes were on the unveiling of the UK’s first budget in over a year which modestly over-delivered and appears to be supporting sterling. UK Chancellor of the Exchequer Rishi Sunak announced a large package of support measures which were ultimately designed to extend the government life support on offer to sectors currently forced shut by lockdown and to boost the post-pandemic recovery in a series of tax-raising plans to help rebalance public finances.
Here is a summary of the main points:
- Furlough to be extended until the end of September
- Support for self-employed also continues to September
- Universal credit uplift remains in place for another 6 months
- 5% VAT rate for hospitality extended to September
- Corporation tax increased to 25% in 2023
- Stamp duty holiday extended to June
The UK has borrowed £355 billion which equates to 17% of Gross Domestic Product (GDP) which is the highest since the second world war. It is widely perceived however that the budget improves the economic outlook for the UK and money markets reacted accordingly.
With little data being released today traders will be keeping a close eye on the US employment data which is being released tomorrow at 1:30pm which includes the key non-farm payroll figure.
Have a great day.
William Jones, Senior Relationship Manager.
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