UK: Giveaway budget - Nomura

Sandeep Kanihama FXStreet Contributor

Analysts at Nomura suggest that the UK’s budget was a giveaway budget, largely thanks to spending on the National Health Service (NHS) but also owing to a modest fiscal easing on top of that too.

Key Quotes

“One might say – ‘but didn’t we know about the higher NHS spending already?’ The answer of course is ‘yes’ – the government announced the sizable spending increase on health in June. But what we didn’t know until yesterday was that it would not be funded by a rise in taxes or a cut in spending elsewhere. That’s what makes yesterday’s budget a big deal fiscally.”

“In short, the measures announced in yesterday’s budget are worth around 0.7% of GDP per year between 2019-20 and 2021-22, rising to over 1% of GDP by the end of the forecast horizon. This is, therefore, the biggest fiscal loosening since the recession following the financial crisis.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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