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August 21st - Despite a slight decrease in the UK governments budget deficit in the first four months of the current fiscal year, borrowing in July was still higher than the same period last year due to increased spending exceeding record income tax revenue. The UK Office for National Statistics said on Friday that the governments budget deficit was £1.8 billion (approximately $2.45 billion), an increase of £700 million from July 2025. So far this fiscal year, total government borrowing has reached £56.7 billion, a decrease of £6 billion from the same period last year, but £2.3 billion higher than the forecast published by the Office for Budget Responsibility.Uruguayan Deputy Foreign Minister: If Netanyahu visits Uruguay, we have an obligation to arrest him. We will abide by international commitments, and there is no doubt about that.In a phone call, the foreign ministers of Iraq and Switzerland emphasized the importance of launching international initiatives to help end the conflict and bring Iran and the United States back to the negotiating table.On August 21, Nomura issued a research report stating that Kuaishous (01024.HK) second-quarter results met expectations, but the slowdown in its core businesses (e-commerce and live streaming) was faster than anticipated. Therefore, the bank maintained its "Neutral" rating but lowered its target price from HK$51 to HK$40.European stock index futures were mostly stable, with the Euro Stoxx 50 futures essentially unchanged, the German DAX futures down 0.04%, the French CAC 40 futures up 0.17%, and the UK FTSE 100 futures essentially unchanged.

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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