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Important day for the UK Economy

Bank of England Minutes 9:30am

At 9:30am London the Bank of England minutes for the MPC meeting held on the 4 and 5 March will be released. The expectation is that the members voted unanimously (9 - 0) to leave interest rates and asset purchases unchanged. Traders will be checking through the minutes of the meeting for any signals of the timing of the tightening of policy. This month is six years that the base interest rate has been held at the record low of 0.50%.

Employment data 9:30am

At the same time the as the Bank of England minutes the ONS release the headline ILO Unemployment rate (expected to be 5.6% vs 5.7% previous). For investors the accompanying average earnings data is important as the BoE has highlighted labour market capacity as the caveat for raising interest rates.

The Budget 12:30pm (London)

George Osborne, the Chancellor of the Exchequer will announce the government’s final budget just 50 days before the general election. This is an important opportunity for the Conservative part of the government to try and reiterate their political position and how they will help the economy going forward.

A few expectations:

-Reduction in business rates

-Significant tax cut for North Sea Oil

-Investment into Northern UK

-Tax on multinationals

-Further pension reforms

The UK economy has improved considerably since the collapse of Lehman Brothers, however Osborne has come under criticism that deficit hasn’t been reduced as quickly as predicted.

The general election is seen as a major risk for UK, as the opinion polls show no outright winner; with the uncertainty a weakness for the sterling.  If the Conservatives take power in the next parliament then they have promised an “in / out” referendum on the UK’s membership of the European Union. 

GBPUSD: 1.4747

EURGBP: 0.7185 (GBPEUR: 1.3917)

FTSE 100: 6858

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