The Chancellor of the Exchequer George Osborne is to announce the UK’s budget to Parliament at 12:30 GMT. This is a key date for the markets as rating agencies have identified its importance for the credit rating and outlook for the UK.
Sterling has been under considerable pressure since the start of the year with credit rating agency Moody’s downgrading the UK for the first time since 1978 from the top level of AAA to Aa1. Osborne had continually cited the importance of the top credit rating, as a benchmark for his term and justification for austerity measures. The significance of the UK’s credit ratings is because of the cost of borrowing and the potential increases would have on the government’s debt. However the debt markets seemed to have shrugged off the downgrade with Sterling feeling the pressure.
Osborne is under considerable pressure as the UK economy is flat lining with the economic recovery stuttering and some analysts are eyeing a triple dip recession. Measures need to be put in place to generate economic growth with some large scale development projects expected to be announced.
Sterling has ticked up following the release of this morning’s Bank of England’s Minutes. We recommend trading with risk management strategies if you have open positions during the announcement such as stop losses and take profits.
To follow the Budget and the markets Twitter is using the #Budget2013
Betting website Paddy Power have a section for "Cliche Betting - To be said during speech"
A small sample:
"I offer my resignation" 66/1
"Credit rating" 2/1
"We're all in this together" 5/1