Market Reaction to Sunak's Spending Spree
Fiona Cincotta March 11, 2020 2:53 PM
Debt to GDP will be 2.1% this year, rising to 2.8% in 2021. These figures don’t take into account the hit to the economy that coronavirus could bring.
The pound’s reaction has been fairly muted given today’s events. With the BoE cutting interest rates by 50 basis points this morning and the Chancellor unveiling a huge spending plan in the afternoon the overall impact appears to be one of stability. This is the coordinated response that the markets have been looking for. GBP/USD
Equity Winners & Losers
Firms with big exposure to the infrastructure space such as Kier (+16% )and Balfour Beatty (+12%) are performing well, along with broadband providers BT and Spirent Communications. The pub sector should theoretically benefit from the freeze on beer duty and discounts on business rates although, this is not showing through owing to the coronavirus disruption. House builders have also failed to react despite £12.2 billion investment in affordable housing.
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