Pound Reacts to Budget

The UK Budget speech, which took place yesterday (Wednesday 22nd), brought with it much anticipation and was slammed by critics and opposition leaders.

According to many, the Chancellor's predictions for the UK economy - growth to reach 3.5% by 2011 - were far too positive and some even labelled it as "fantasy".

After the speech came the IMF announcements for the world economy, and their forecast for the UK was markedly different to Mr Darling's. According to them, the economy is in fact going to contract to a total of 4.1% in 2009 alone.

Alistair Darling's speech (and possibly also the IMF's) had an effect on the currency market, and added to weakening of the British pound. At 10:30 am New York time, the pound was trading at $1.4539 and 89.62p to the euro.