UK: No surprises in Spring Statement – Deutsche Bank

Analysts at Deutsche Bank explains that in the UK there were no huge surprises to come from Chancellor Hammond’s Spring Statement and as widely expected the borrowing numbers for the current fiscal year and also the next were revised down.

Key Quotes

“This year was revised down from £50bn to £45bn while next year was revised down from £40bn to £37bn. Headroom relative to the 2% cyclically adjusted borrowing to GDP target by 2020-21 is more or less unchanged versus the November estimate at around £15bn, so not a huge amount more fiscal room.”

“Finally GDP forecasts remain fairly lacklustre and included a cut to the 2021-22 forecast. The 2018 forecast was however revised up one-tenth to 1.5%. Sterling closed up +0.40% last night versus the USD but that appeared to be more USD weakness related to the Tillerson news than anything else. Indeed versus the Euro, Sterling was closer to unchanged. Gilt yields also finished more or less unchanged by the end of play.”