LONDON — The pound is sliding on Wednesday as markets await the Autumn Statement, the government’s first major economic update since Brexit, and the first with Theresa May as prime minister and Philip Hammond as chancellor.
Around 10.30 a.m. GMT (5.30 a.m. ET) sterling is trading lower by roughly 0.35% against the dollar, dropping back below the $1.24 mark, where it has hovered in recent days.
Here is the chart:
While sterling is lower, the loss is not exactly substantial and reflects muted expectations of what the markets expect from Chancellor Hammond when he speaks at 12.30 p.m. GMT (7.30 a.m. ET).
Expectations are that the statement — also Hammond’s first as chancellor — will mark a big shift away from the economic policies of the previous government under Prime Minister David Cameron and Chancellor George Osborne. The pair aggressively pursued cost cutting in order to eliminate the government’s budget deficit and return the UK to a surplus.
Hammond is reportedly planning to abandon rigid fiscal targets in favour of a more flexible framework that will the Chancellor to deploy a bigger fiscal stimulus next year if needed.
This more flexible approach is in stark departure to the last Chancellor, George Osborne, whose budgets were defined by their clear targets to reduce the deficit and balance government spending.
The pound is also down on the euro on the day, falling just over 0.2%: