Sterling unimpressed by 'political' Budget

Published:  25 March, 2010

LONDON: The Budget had no noticeable impact on sterling, but its impact on Labour's chances in the election is being closely watched by the financial markets.

Phil McHugh, senior executive dealer at leading foreign exchange firm Currencies Direct, said: "Sterling was unmoved by a highly political Budget which highlighted the clear policy differences between Labour and the Conservatives over how and when to institute public spending cuts.

"The announcement that government borrowing forecasts are being revised downwards, while good news, covers over a deep er concern that the level of borrowing remains exceptionally high and there are no clear plans on how the deficit will be cut.

"The markets did not expect clarity on cutting the deficit. There was far more interest in the effect of this Budget on Labour's prospects in the polls; a hung Parliament being a worst case scenario for sterling."

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