GBP

BTW, I think Osborne will put VAT up to at least 20%. Even 25% would not surprise me. That would send some messages.

When the governments of Sweden and Canada in the mid-1990s needed to make huge budget cuts, they realised that this would perhaps not be the most popular move. So with good political instincts they made them deep and early in their administrations. Thereby winning time to have an election many years hence.

Today the new chancellor George Osborne is announcing a downpayment of 6 billion in cuts to Government spending. Really this does not even qualify as a rounding error (indeed the most recent published PSBR was more off target than 6 billion).

There is a budget next month to go for the real deal, but when 60 billion needs to be taken out of public sector and away from future taxpayers debt burden, speed is of the essence. I can only hope that the government realises that death by a thousand cuts is a form of torture and not a successful political strategy.

as for indices..there could be a possibility of shotterm support bounce, maybe 2-3days, before the huge downmove could be back..

yes if tha happens

i believe cable has further to fall to 1.40 at least. there is not much media speculation on sterling at present as all eyes have been on euro. so despite non comercial speculation being high against sterling, media speculation is limited.

the euro is highly media covered at present and perception was incredibally bearish hence the bounce this week. it is too early to establish that a new euro trend has emerged.