GBP Retains Early Gains as UK Annual Deficit Falls
- UK annual borrowing falls but rises in March
Public sector net borrowing (ex public sector banks) fell by GBP20.0bn to GBP52.0bn in the financial year ending March 2017, compared with the financial year ending March 2016, a touch above estimates of GBP51.7bn. This is the lowest net borrowing since the financial year ending March 2008, according to data from the Office for National Statistics.
However, public sector net borrowing (ex public sector banks) rose by GBP0.8bn to GBP5.1bn in March 2017, compared with March 2016, the highest March borrowing since 2015.
The public sector net borrowing is the fiscal deficit between UK public sector revenues and expenditure.
GBP continued its recent uplift against the USD before and after the release, and trades within 1 cent of last week’s six-month high of 1.29060. GBP may struggle to break the recent high with the first look of UK 1Q GDP set to be released on Friday. Markets are expecting the economy to have grown by 0.4% in the quarter, compared to 0.7% growth seen in the previous quarter.
UK PM Theresa May will also meet with EU President Jean Claude Juncker and chief Brexit negotiator Michel Barnier in London on Wednesday to begin talks about the UK leaving the European Union.
Chart: GBPUSD 5-Minute Timeframe (April 25, 2017)
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--- Written by Nick Cawley, Analyst
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