UK Chancellor of the Exchequer Rishi Sunak will present his Budget to the Westminster Parliament later Wednesday but with many of the measures pre-announced it is unlikely to roil either GBP or the UK stock market.
Sunak is expected to extend the UK’s jobs rescue plan – known as the furlough scheme – to September but also to warn that the public finances will need to be fixed once a recovery is in sight. This will mean further issues of Government debt, with a poll of dealers by the Reuters news agency showing that the UK is expected to sell nearly £250 billion of Government bonds in the coming 2021/22 financial year – the second-highest total on record.
In the same poll, the UK budget watchdog, the Office for Budget Responsibility, is expected to forecast borrowing of £180 billion in the coming year, down from the £394 billion it predicted would be borrowed for 2020/21.
Traders will need to keep an eye on both the borrowing data and the economic forecasts but unless these are far away from expectations GBP/USD will likely continue to trade around the 1.40 mark, where there is currently round-number resistance.