Currency exchange uplift for sterling

Currency exchange rates for sterling could be given a boost as the government is set to announce billions of pounds worth of cutbacks.

The coalition government of the Conservatives and the Liberal Democrat party will outline £6 billion worth of cutbacks.

Before the election, the Conservatives had promised to deliver an emergency Budget within 50 days of getting into power in order to reassure the markets that the UK is tackling its national debt.

These cutbacks are intended to do just that and are likely to be fully explained and added to in the Budget on June 22nd.

Paul Robson, currency strategist at the Royal Bank of Scotland, told Reuters: "The new government is showing that fiscal policy is at the heart of its plans and that is providing some support to sterling."

The pound fell against the euro today (May 18th) following an upward trend prompted by difficulties among the single currency's member countries.

At 11:00 BST, the pound bought €1.16, while against the dollar the British currency bought $1.44.

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Posted by Eleanor Ward