Magna Financial Market Report – Friday 21st March 2025
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• GBP drops on £20bn borrowing miss
• BoE holds rates, two cuts expected
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RECAP
Yesterday, the Bank of England kept interest rates steady at 4.5%, which was largely anticipated. The meeting took on a hawkish tone, especially since only one member voted in favor of a rate cut, signaling a more cautious outlook. The British pound saw a slight increase as market expectations for rate cuts this year were adjusted down from 55 basis points to 45. However, these gains proved to be short-lived, indicating that the markets are more confident in the likelihood of just two rate cuts this year.
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OUR SUMMARY
This morning, the British pound faced a setback as reports indicated that UK borrowing for this fiscal year is expected to exceed forecasts by £20 billion, underscoring the vulnerability of the nation’s public finances just ahead of the Spring Budget next week. Chancellor Rachel Reeves is anticipated to unveil significant cuts to public spending and welfare on March 26, a move likely to add further strain to the economy. With little economic data expected for the remainder of the day, market focus will likely remain on the upcoming budget announcement and its potential impact.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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