UK Chancellor of the Exchequer George Osborne rejected demands of the opposition to reconsider the spending cuts that are biggest since World War II. The Great Britain pound reacted positively to the news.
Opposition to the spending cuts is strengthening as riots and looting in London intensifies and spreads to other cities. Yet Britain’s government remains firm in their intention to maintain the record cuts. Osborne explained that the credibility of the UK austerity measures helped in attracting investors to government bonds, aiding the nation’s economy. Prime Minister David Cameron claimed that the planned decrease of expenditure on the police can be performed “without any reductions in visible policing”.
The sterling gained against the euro, the dollar and the yen on yesterday’s trading session. The UK currency slid against the greenback as today’s trading session has started. The pound attempts to hold against the yen, but slowly gives up gains. Against the euro Britain’s currency rallied for three sessions and still hasn’t showed signs of weakening.
GBP/USD advanced from 1.6132 to 1.6237 and retreated to 1.6212 as of 1:34 GMT today. GBP/JPY rallied from 123.95 to 124.72 on the previous trading session and attempts to hold at this today. Meanwhile, EUR/GBP fell from 0.8770 to 0.8750 today in the third straight session of declines.
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