UK Chancellor Sunak planning to inject the UK with a post-lockdown boom
|The UK's economy is under the spotlight considering how far the pound has managed to rally in recent days without pause for a breath.
The bank of England recently dialled back on negative rates and the vaccine roll-out has gone better than expected for which PM Boris Johnson has decided to tentatively ease lockdown restrictions.
Additionally, there haven't been any reported disruptions to UK trade since Brexit and the pent-up demand with prospects of a strong economic recovery have boosted sterling.
In recent news, the UK chancellor Rishi Sunak is planning 'giveaway' budget next week to inject the UK with a post-lockdown boom, according to an article in the Daily Mail.
''The mail can reveal Treasury officials are examining even more dramatic plans for a major stimulus to the economy later this year.''
Market implications
If investors take a leaf out of the US book, then this is promising for the UK shares market but potentially limiting for the prospects for higher highs in the pound.
With that being said, if investors take the view that this will boost the economy and if that outweighs the risks of lower real yields, then the pound could benefit from demand for UK assets.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.