Forex Flash: UK PSNB reveals budget troubles, CBI orders give no signs of turn-around – TD Securities

The January Public Sector Net Borrowing data still shows the overall picture of a government that is falling behind in its fiscal plans. “The government reported a surplus of £11.4bn, which is better than both last year’s Jan reading of £6.4bn and the consensus forecast of £8.7bn, although it was boosted by £3.8bn from the BoE’s transfer of APF profits”, wrote analyst Marcin Budkiewicz. “But with yesterday’s 4G auction raising about £1bn less than expected and a lack of economic growth leading to persistent downside surprises for government finances, the government is going to have a challenge in putting together the annual Budget for 20 March”, Budkiewicz added. CBI orders improved from -20 to -14, but details came in mixed: export orders rose from -29 to -20, but expectations slipping from +8 to +5. “So no signs yet of a substantial turn-around in UK manufacturing based on the CBI survey”, concluded the TD Securities analyst.