DailyFX European Market Wrap: Hammond Budget Lifts UK GDP Estimates: 3/8/17

DailyFX European Market Wrap: Hammond Budget Lifts UK GDP Estimates: 3/8/17


The British Chancellor announced an extra £2bn for social care services in England in the Budget as well as increasing national insurance bills for the self-employed. It is the last Spring Budget and comes three weeks before the UK is expected to give formal notice of its departure from the EU.

Philip Hammond admitted the system was under pressure with an ageing population, which was his reason for deciding to inject £2bn for services which would allow councils to “act now to commission new care packages” with an extra £325m for NHS reform programmes.

He said the Office for Budget Responsibility had revised up its growth forecasts from 1.4% to 2% for 2017 and that borrowing would be £16.8bn lower than previously forecast.

Other movers include German sportswear giant Adidas, one of the highest gainers after reporting a net income growth of 41%. G4S gained after reporting an 18 percent increase in adjusted profit last year. Meanwhile French utility firm EDF’s shares slumped over 13% to a fresh all-time low after it launched a €4bn capital increase to support investment programmes like the UK’s Hinkley Point nuclear project.

French politics is also a key theme once again this Wednesday with French presidential hopeful Francois Fillon being accused of accepting an undeclared 53,000 euros loan. And in Asia China reported its first monthly trade deficit in three years.

Looking ahead to tomorrow, all eyes will be on the ECB’s March policy meeting. While neither a rate move nor a change to the QE program are expected, President Draghi’s press conference typically sends a jolt through the Euro.