Today's news headlines:
‘U.K. Budget Signals Sunak Embracing Inflation to Erode Debt Pile’. In yesterday’s budget, Chancellor Rishi Sunak unveiled a slew of measures designed to stimulate the UK economy over the next six years. To boost growth in the economy, Sunak announced a 6.6% increase in the national minimum wage, looser restrictions on public sector pay, tax cuts in hospitality, and a freeze in petrol duties. This, combined with calls from ministers for businesses to increase wages, could contribute to a prolonged period of higher inflation, with the OBR predicting that the measure of price rises could reach a peak of 5.0%—twice the Bank of England’s target. (Bloomberg)
‘Biden Makes Final Push for Economic Deal Before European Summits’. The clock is ticking for congressional Democrats to finalize a tax and spending plan worth as much as $2tn before President Biden leaves for European Summits this week. Senate Budget Chairman Bernie Sanders has sharply criticized moderates for rejecting revenue proposals, commenting that ‘almost every sensible progressive revenue option that the president wants, that the American people want, that I want, seems to be sabotaged’. (Bloomberg)
Most Asian stocks fell overnight as fears grow that higher inflation will force tighter monetary policy, eventually curbing the global economic recovery. Sterling was little changed after the UK’s budget announcement.
ECB Monetary Policy Statement: 12.45pm
ECB Main Refinancing Rate: 12.45pm
ECB Press Conference: 1.30pm
US Advance Gross Domestic Product: 1.30pm
US Weekly Jobless Claims: 1.30pm
GBP/USD – 1.3755
GBP/EUR – 1.1860
EUR/USD – 1.1600
USD/CAD – 1.2365
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