'Awful April' puts both Sterling and Chancellor Reeves under pressure..
|
| How will the UK government fund its spending splurge?
Economists have posed this question monthly and we are all still none-the-wiser. Debt interest costs are rising and currently sit at the highest levels since 1998. The UK tax burden is at record highs and nothing is showing that this economic miracle is coming.
What the markets want to see is an amendment to the government's fiscal plan, but thus far Chancellor Reeves isn't budging and so the likelihood of Autumn tax rises are increasing.
For consumers the risk is obvious. For the Pound, the risk is that investors run away from UK assets (like they did in April where £-€ lost 4%).
April's GDP result came in at -0.3%, down from +0.2% and worse than the -0.1% forecast.
9 out of 14 sub-sectors fell with services output showing the first monthly drop in 7-months.
Manufacturing production was worse than expected also and continues to slump and the goods trade balance went deeper into deficit as exports were eclipsed by imports.
Not a good week for the UK & £..
GBP v EUR is now down 2.5% since the beginning of the year. |
|