The UK’s Chancellor of the Exchequer, Jeremy Hunt, presented the spring budget to the House of Commons. Hunt said that according to the Office for Budget Responsibility (OBR), the economy is expected to grow 0.8% in 2024 and 1.9% next year, 0.5% higher than the autumn forecast. Regarding debt, the OBR foresaw headline debt would rise above 100% of GDP, though they noted that it would fall every year to just 94.3% by 2028-29.
Hunt announced a tax rate cut in employees' National Insurance from 10% to 8%, while frozen fuel and alcohol duty, as rumored before the announcement.
Across the pond, US Federal Reserve Chair Jerome Powell said the US economy is nowhere near falling into recession, though the Fed failed to provide guidance regarding future interest rate cuts. Powell expects inflation to converge toward the Fed’s 2% goal while the economy grows. He added, “If that's the case, it will be appropriate for interest rates to come down significantly over the coming years.”
Data-wise, the US economic docket featured the US ADP National Employment report for February, a poll showing private companies hiring. The figures missed estimates but were above January’s data, suggesting the labor market remains tight. Nevertheless, the US Job Openings and Labor Turnover Survey (JOLTS) for January showed that there were 8.863 million job openings, a figure that fell short of expectations and was marginally lower than the previous month's reports of 8.9 million and 8.889 million, respectively.
After the data, the GBP/USD jumped from around 1.2720s toward the day highs before trimming some of its gains. UK Gilts were little changed, an indication that the UK’s Budget was well received amongst investors.
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