Chancellor offers a fairer deal for savers and little impact on sterling markets, say analysts

Analysts from foreign exchange and currency providers and pension and asset management specialists saw encouraging signs in George Osborne’s Autumn Statement, but remained cautious about the recovery.

Adrian Jacob, director of foreign exchange and payment providers, Currency UK, commented on its impact on the currency markets.“Chancellor Osborne delivered his Autumn Statement in a move which headlined movements in stamp duty and other tax measures. The markets shrugged all this off and didn’t overreact to it. We did see sterling strengthen against euro and US dollar yesterday but this was due to poor euro PMI as opposed to strong UK and US PMI.Mr Jacob continued, “Chancellor Osborne announcing that the Government will miss the budget target did not hurt sterling. The interesting aspect of the statement for the markets was the continuation of the theme that the Government will continue to tackle the budget deficit, whilst it is very much the job of Mark Carney and his colleagues at the Bank of England to stimulate economic growth”.He cautioned, “Although there have been seven consecutive quarters of UK growth, the worrying state of the global economy still urges caution in the UK.“Today, we will see interest rate decisions from the Bank of England and the European Central Bank. Expect absolutely nothing of interest to come out of the Bank of England as the rates will not change and we will not get the minutes for another week.Mr Jacob also predicted little change at the European Central Bank, “It is also highly unlikely that the ECB will change their interest rates, but with Mario Draghi holding his press conference immediately after the announcement, this is what the markets are looking for. Whilst there may be accusations of repetition of a theme, traders are waiting to see if Draghi will introduce quantitative easing. My guess is no. His other measures have hardly kicked in yet and he’ll probably just continue to flirt with the idea”.Commenting on the pension and ISA tax changes following the Autumn Statement announcement, Kate Smith, regulatory strategy manager at life insurance, pension and asset management specialists, Aegon said, “Today the Chancellor continues his quest to set out fairer deal for savers, most people view their house as the major financial asset that they leave behind to their loved ones.“The Chancellor has sought to put both pensions and ISA savings on an equal footing by encouraging people to view them as assets that can be passed on without punitive rates of tax.“By incentivising long term saving, the Chancellor may encourage people to put more money towards their pension and ISA, safe in the knowledge, that should the worse happen, their saving will not have been in vain and that those closest to them will see the benefit.”For more Relocate news and features about corporate finance click hereFor more Relocate news and features about employee finance click here

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