Sterling slips on public finance concerns
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Daily Currency Update
GBP/USD has slipped back under 1.33 this morning as a report by the National Institute of Economic and Social Research raised concerns about the health of the UK's finances. Facing slowing economic growth, the government is under pressure to raise taxes to meet its fiscal goals. According to a report from a leading think tank, to adhere to her fiscal commitments, Chancellor Rachel Reeves may need to implement a "moderate but sustained increase in taxes" to fund the government's spending plans. The recent data showing an abrupt slowdown in economic growth has increased the likelihood that the Chancellor will need to introduce tax hikes in the autumn budget to close the funding gap.Key Movers
Yesterday saw the latest ISM Services PMI from the US with the closely followed survey falling short of expectations with a print of 50.1. The report repeatedly mentioned Donald Trumps tariff plans as the biggest area of concern and the reason for the survey nearly hitting the 50 level that divides expansion and contraction. It’s a quiet day today with tomorrows Bank of England interest rate decision the next event of note. EUR/USD continues to track sideways with it currently around 1.1575.Expected Ranges
- GBP/USD: 1.3225 - 1.3350 ▼
- GBP/EUR: 1.1440 - 1.1560 ▼
- GBP/AUD: 2.0410 - 2.0565 ▼
- EUR/USD: 1.1520 - 1.1635 ▲