This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

UK To Deliver Another Austere Budget

The economy shrank by 0.3 percent in the last three months of 2012, and many analysts have predicted another contraction in the first quarter of 2013. That would put the U.K. back into a recession â¿¿ technically defined as two consecutive quarters of economic contraction.

Osborne admitted that the recovery was taking "longer than anyone hoped," and that problems in Europe were holding Britain back. The 17 European Union countries that use the euro account for around 40 percent of British exports and many of them are in recession, some of them severe. The current crisis in Cyprus is hardly going to help inspire confidence in the eurozone.

"We are still very exposed to what happens on the continent," said Osborne, who confirmed that British military and government personnel on the island would not lose out if a raid on deposits goes ahead.

Because growth has disappointed over the past few years, the government has struggled to get its public finances into shape. The budget office now estimates public debt will continue rising until 2016-17, peaking at 85.6 percent of Britain's annual gross domestic product. In its last forecast in December, it estimated debt would peak at 79.9 percent in 2015-16.

Osborne did tinker a bit with the remit of the Bank of England â¿¿ giving it the chance to employ forward-looking guidance for interest rate expectations, similar to the approach now taken at the U.S. Federal Reserve.

"But this is not as bold a change as many were probably hoping for," said Vicky Redwood, chief U.K. economist at Capital Economics.

The central bank will have a new governor in the summer when current Bank of Canada chief Mark Carney takes the helm. Many expect further changes to the Bank of England's remit then.

Osborne said that some government departments will be ordered to free up money and that 3 billion pounds would be diverted to infrastructure projects. The Conservatives' coalition partners, the Liberal Democrats, have been pushing for more projects funded by borrowing in the hope of supporting economic growth.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs