Hunt For a Stronger Economy? The Autumn Statement
Updated: Sep 24, 2024
The announcement of the Autumn Statement is expected to have a significant impact on the foreign exchange market.
The Chancellor is expected to make a number of announcements 👇 👇
These announcements will include topics such as:
tax cuts
spending increases
changes to fiscal policy
The announcements will likely affect the pound sterling (GBP) exchange rate.
Tax Cuts
One of the most important announcements will be the Chancellor's decision on tax cuts. If the Chancellor announces significant tax cuts, this could boost investor confidence and strengthen the GBP. However, if the Chancellor announces only minor tax cuts, or if he decides to raise taxes, this could weaken the GBP.
Spending
The Chancellor is also expected to announce increases in spending. These spending increases could be on infrastructure, education, or healthcare. If the Chancellor announces significant spending increases, this could stimulate the economy and strengthen the GBP. However, if the Chancellor announces only minor spending increases, or if he decides to cut spending, this could weaken the GBP.
Fiscal Policy
Finally, the Chancellor is expected to make changes to fiscal policy. These changes could include changes to borrowing targets or changes to the government's debt-to-GDP ratio. If the Chancellor announces changes that are seen as positive for the economy, this could strengthen the GBP. However, if the Chancellor announces changes that are seen as negative for the economy, this could weaken the GBP.
Overall, the impact of the Autumn Statement on the foreign exchange market will depend on the specific details of the announcements. However, it is likely that the statement will have a significant impact on the GBP exchange rate.
Our Thoughts
This is a crucial budget for the Conservative government, it will need to give the general public, businesses and investors confidence that there are green shoots that the economy is heading in the right direction as well as being in safe hands.
Tax cuts and changes to fiscal policy could create a positive sentiment and could stimulate confidence in the UK economy which in turn could be good for GBP.
This budget will look to stimulate outside investment into the UK economy as well as incentivise businesses to continue to invest and grow.
Having the right systems and processes in place can help manage currency risk.
At PathFinder FX we are offering a complimentary Foreign Exchange Audit to review your business's processes, strategies and systems. This will ensure you are getting the most competitive rates, service and fintech solutions to optimise your foreign currency exposure.
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