UK pound is struggling today, dropping on the latest figures related to government borrowing. As the government prepares to share its new budget, it’s clear that there isn’t going to be much room for stimulus. The news has the sterling heading lower against the euro and the US dollar today.
Borrowing figures for the British government show that, year-to-date in February, the UK government has borrowed 110 billion pounds. The news came as public sector borrowing increased by 15.2 billion pounds in February. This amounts to record borrowing for the UK government, and many are concerned about the ability of Britain’s policymakers to stimulate growth.
Indeed, some think that the recently released figures indicate that Britain’s situation is worse than many expected. And, with so much borrowing going on, there isn’t a lot that can be done in terms of offering tax breaks, or increasing spending, as ways to stimulate economic growth. It doesn’t look like there is a lot that can be done, and it may be that another round quantitative easing is in the works from the Bank of England.
This uncertainty, and the concern that the British economy might be in trouble, is contributing to a lower pound today. The pound is down against the euro and the US dollar on this news of weakness.
At 13:15 GMT GBP/USD is down to 1.5842 from the open at 1.5858. EUR/GBP is lower at 0.8350, down 0.8339.
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