Forex Flash: UK Budget preview - Nomura

Looking towards the pending UK budget, Nomura economists Philip Rush and Andy Chaytor note that further disappointment at demand has brought some slight fiscal slippage, which is compounded by “one-off” factors in the short term.

They write, “We expect the OBR to judge most of this as cyclical, thus saving the government from needing to break political paralysis and announce new fiscal consolidation measures. At least the cash position is slipping less, dampening pressure on the new financing requirement. However, we expect another fall in T-Bills (related to the accumulation/transfer of income from the BoE) to lift the 2013-14 gilt remit to £173.5bn.”