The British pound enjoyed a positive push on Wednesday following the UKâs Autumn Statement. Chancellor Philip Hammond gave the statement earlier today, during which he spoke about increasing productivity to create better living standards for workers.
Hammond announced new spending plans that are aimed at the productivity problem in the United Kingdom. In the statement, increased spending on infrastructure and innovation was prioritized. An additional fiscal stimulus to the UKâs roads and railways will be introduced to benefit businesses and investors, and is expected to support surrounding sectors as well.
We choose in this Autumn Statement to prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britainâs productivity
While an increased focus on innovation will help improving âthe high-wage, high skill economy that will deliver higher living standards for working people,â said Hammond to lawmakers while announcing his new plans. The UKâs Prime Minister Theresa May already confirmed her governmentâs commitment to invest an extra 2 billion British pound in research and development when she spoke to the CBI conference on Monday.
The productivity gap is well known, but shocking nonetheless: We lag the US and Germany by some 30 percentage points. But we also lag France by over 20 and Italy by 8
The British pound is showing resilience to losses against the US dollar during the current week due to improved data and favorable government spending plans. However, the uncertainty surrounding Brexit negotiations, which are expected to start in April 2017, is weighing down on the currency at a time when the dollar is gaining a lot of strength from the economic outlook of the USA.
GBP/USD traded at 1.2381 as of 15:03 GMT after touching 1.2431 at 13:00 GMT, the pairâs highest level for the day. However, GBP/USD was quick to return to 1.2362 at 13:40 GMT. The pair opened trading at 1.2419 today.
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