UK: First current fiscal surplus - BBH

The UK reported its first current fiscal surplus (excluding capital investment), for 2001-2002, helped by the smaller than expected shortfall in March, points out the research team at BBH.  

Key Quotes

“Overall, the deficit fell from 9.9% of GDP in 2009 to 2.1% last year.  The Office for Budget Responsibility to did not anticipate this milestone until this year.  The holds local elections, and the government's austerity is an issue in some areas.  While the odds of a BOE hike next month were halved by the soft data and the seemingly cautious comments from Governor Carney last week, the probability, projecting from derivatives' market has increased slightly over the last couple of sessions to stand near 55%.”

“Sterling needs to resurface above $1.3965 to improve the tone, but the intraday technical indicators warn that this may be difficult to sustain.    There may be some intermittent support (e.g., 100-day moving average ~$1.3855), but nothing looks strong nearer $1.38.”