Pound extends losses as Chancellor Reeves reveals budget

• This budget raises taxes by GBP40 billion
• We will maintain BOE’s 2% inflation target
• OBR says budget will boost long term growth

Looking at the GDP forecasts changes from March:

• 2024: Up from 0.8% to 1.1%
• 2025: Up from 1.9% to 2.0%
• 2026: Down from 2.0% to 1.8%
• 2027: Down from 1.8% to 1.5%
• 2028: Down from 1.7% to 1.5%
• 2029: New forecast of 1.6%

For CPI changes from March:

• 2024: Up from 2.2% to 2.5%
• 2025: Up from 1.5% to 2.6%
• 2026: Up from 1.6% to 2.3%
• 2027: Up from 1.9% to 2.1%
• 2028: Up from 2.0% to 2.1%
• 2029: New forecast of 2.0%

The CPI forecasts are notably higher but the pound is at the lows of the day, down 77 pips to 1.2940.

This article was written by Adam Button at www.forexlive.com.