The pound slipped against the euro and the dollar yesterday following the announcement that the UK government will be introducing fresh tax hikes. The government will be introducing this to pay for the health and social care systems.
However, economists are worried that this could hamper the UK’s economic recovery, harking back to 2010 when raising VAT from 17.5% to 20% had an adverse effect on the economy. Many also take the view that with the end of the furlough scheme approaching, this could have a significant impact on spending.
It’s a light day for UK data today, but investors will be looking to Friday when GDP and industrial production figures will be released.
