Little reference to Brexit in Uk budget
UK's budget and impact on the GBP
The UK's budget has been and gone , so what's the verdict?. There was £500 mln earmarked for Brexit preparations, but aside from that Brexit was left well alone since a hard brexit would need a different budget. The GDP growth for the next five years is as follows. The last projections were identical to these aside from 2020 which has increased to 1.4 from 1.3% previously. Wage growth was expected to rise by the OBR, so that will add inflationary pressure for the GBP going forward.
Public borrowing
The level of public borrowing is set to fall year on year for the next five years:
2019/2020 £31.8bln
2020-2021 £23.8bln
2021-2022 £26.7bln
2022-2023 £20.8bln
2023-2024 £19.8bln
The only major surprise was that the basic income tax threshold level was increased from £11,850 to £12,500 one year earlier than had been planned, but that is not going to obviously have a major impact, just nice for all of us who live in the UK to get a tax cut ;-)
All in all there is nothing in the budget to alter the GBP projection of being offered in the near term. The trade is to keep selling the GBP on rallies until there is any more positive Brexit news. See yesterday's post for a timeline of events that are now ahead in the Brexit negotiations.
