GBP: public sector net borrowing far better than expected

Good news for the UK yesterday as the budget deficit came in much better than many analysts had forecast. It dropped to £2.6 billion in December from the month before, but had been expected to come in at £5 billion. Total borrowing since April 2017 is at £50 billion, some 12% less than in the same period in 2016.

Sterling touched $1.40 before dropping back a little more as the US government shutdown came to an end – for now at least. There has been considerable volatility between the pairing since the start of 2018 and it would be impossible to rule out more movements in the coming weeks and months.

Today we have the unemployment rate for November which is expected to remain at its current 42-year low of 4.3%.