The Chancellor of the Exchequer (Alistair Darling) has a difficult task on Wednesday, trying to balance the books of the UK.
He has a difficult task of convincing the UK, that he has the ability and plans to restore the UK economy, whilst reducing the current budget deficit.
Any changes must not harm the recovery of the economy, but the UK is still the only major country to officially still be in recession.
With a general election only a matter of months away, he needs to demonstrate that Labour have the ability to help the UK recover.
He is likely to admit the economy contracted 4.75 per cent this year. This was more than his expectations.
A raft of economic data this week will paint a picture in terms of the economic recovery and how it is progressing. Similar data for German industrial production, also out on Tuesday, are expected to show a rise of 1 per cent.
The US will publish retail sales for November this Friday. This hopefully should give a view on consumer spending now that the “cash for clunkers” car scheme has ended.
Friday sees economic data from China for November. This may give a boost to the global recovery.
The Bank of England will probably leave interest rates and the asset purchase scheme unchanged at Thursday’s meeting.
We will publish our budget summary later this week. In the meantime if you would like to speak to our financial adviser please contact us.
