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Much ado about nothing

A very flat week for the pound, as the Euro regained some semblance of strength after a Spanish bond auction calmed worries about the country's finances. Despite the Euro's advance, analysts said worries about Spanish banks remain and the market will be looking for the results of bank stress tests which the Spanish central bank said they will publish soon.

It's really a toss up for which currency is weaker at the moment between Sterling and the Euro. Both are weak due to debt problems, and the pound may weaken further after the budget if cuts are more than expected and deemed to raise the risk of a double-dip recession.

And then the budget

Nearly there - B DAY is almost upon us.  George Osborne's  game of cat and mouse will be over, and he has to play his hand.  Has he got a prile of threes, or is he jack high?

Cuts will have to be made, that is inevitable.  Public sector pay and pensions are in the firing line, as are tax credits for people who don't really need them.  General tax rises will hurt, and CGT will be a major talking point.  The crux of the matter is whether Osborne turns out to be a skilled surgeon or an Anthony Perkins clone having a bad day at the Bates Motel.

So what now for the pound?

I'm sorry to say this, but I really don't have a clue!  I could do the professional thing and opt for one result or the other, but the truth is I'd be guessing.  We haven't seen Osborne in action for long enough to get a feel for how he will act.  It would be easy to say that he inspires little confidence and if he gets it right it might be more by chance than design.  Even if you agree, he might still get it right.

Pass.

A bientot,   Rob

Rob Hesketh and France Financial

Rob moved to France in 2003 after working for 30 years in International Banking in the City of London and Brussels.  He joined the Spectrum IFA Group in 2005 and became registered and authorised by the French fiscal authorities in mid 2006.  He is now a partner in Spectrum and looks after client relationships in the South West of France.

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