Elections politics may be driving driving the GBP. There has been fresh indication that the general election could produce a hung Parliament. Latest polls show that the difference between Tory's and Labor are +5 from yougov polls. This is from a double digit level just weeks ago.
The populous does not seems to want to take the Tory medicine of lower government expenditures to help balance the budget. This means that there will be continued uncertainty on how the British government will solve their debt problems. The result is capital moving out of the country. Without taking the bitter pill of government cuts, taxes will have to be raised on the wealthy to redistribute income. This cannot be done forever, so sterling will suffer. Watch to polls as an indication of currency direction.
This battle between taxpayers and benefit receivers as well as debtors and creditors will intensify.
The populous does not seems to want to take the Tory medicine of lower government expenditures to help balance the budget. This means that there will be continued uncertainty on how the British government will solve their debt problems. The result is capital moving out of the country. Without taking the bitter pill of government cuts, taxes will have to be raised on the wealthy to redistribute income. This cannot be done forever, so sterling will suffer. Watch to polls as an indication of currency direction.
This battle between taxpayers and benefit receivers as well as debtors and creditors will intensify.
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