Greg Secker – U.K. Market update brought to you by Traders University

UK Report

The FTSE 100 closed 49.77 points higher at 5,727.65.

According to the latest YouGov/Sun Poll, the Conservative lead has bounced back to a four-point difference. The Tories are at 37 points, Labour are at 33 points, whilst the Lib Dems are holding at 18. Yesterday, the Institute for Fiscal Studies (IFS) has warned, that as the Treasury tries recovering the £51bn black hole in the country’s public finances, Government departments will be faced with cuts to their budgets over the next four years. The think-tank has critized the government for failing to provide detail on how it plans to repair the fiscal damage.  Although in Wednesday’s budget Darling reduced the size of the fiscal repair to £66bn, this was £6bn less than he had estimated in the pre-Budget report and also 30% of this still has to be announced.

Due for release today is the EUR Economic Summit.

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UK Report

The FTSE 100 index rose 29.09 points higher to close at 5,673.63.

It is expected that Darling will keep to his growth forecasts between 1 and 1.5% this year. He expects the economy to grow between 3.25 and 3.75% in 2011. It is also likely that Darling will forecast a 1.75% rise in CPI inflation for 2010 and forecast a 1.6% fall in 2011. According to the YouGov/Sun daily poll, the Conservative lead remains at four points. The fake lobbying sting has had little impact. In February, the rate of inflation slowed, which has raised hopes that inflation has now peaked. Yesterday, official data revealed that the Consumer Prices Index (CPI) fell back down to three per cent in February. Economists have stated that last month’s larger-than-expected decline can be attributed to underlying prices in the UK economy remaining subdued.

Due for release today is the EUR German Ifo Business Climate, GBP Annual Budget release, Core Durable Goods Orders m/m, New Home Sales and the NZD GDP q/q.

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UK Report

The FTSE 100 was down 47.98 points closing at 5,602.14.

According to the YouGov/Sun daily poll, the Conservative lead in the upcoming election has dropped by three points. According to business information services group Experian. A total of 1,834 firms went insolvent during the month, down 15% from February last year. London had the highest number of insolvencies, in February 452 companies became insolvent, and this is up from 428 which occurred 12 months earlier. Darling plans to use tomorrow’s Budget to increase the government’s crackdown on offshore tax evasion, he will do this by doubling the maximum penalty. Treasury sources have stated that the chancellor believes he can protect £1bn of revenue by increasing the penalty to 200% of tax owed.

Due for release today is the CHF SNB Chairman Hildebrand Speaks, GBP CPI y/y, GBP CBI Realized Sales, USD Existing Home Sales and the NZD Current Account.

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UK Report

The FTSE 100 ended up 0.1% to close at 5,650.13.

In the UK, Tescos, Whitbread, SAB Miller, Land Securities and the London Stock Exchange are paying bonuses early so their high earners can avoid the new 50 per cent rate of tax. In this week’s budget Alistair Darling will signal the government’s support for a new tax on banks. Darling wants to change the behavior of banks that engage in “risky” activities by using the tax system. Yesterday, an aide to Darling dismissed concerns that he would use the Budget to announce a unilateral tax on UK banks. The ABI has urged Darling to protect savers and not increase taxes. ABI research has shown that individuals and companies have been hit hard in recent Budgets by the alterations to capital gains tax. The ABI has also called for the government to end the corporation tax for UK companies on profits they make abroad.

Due for release today is the GBP BOE Gov King Speaks.

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UK Report

The FTSE 100 ended up 0.4%, to close at 5,644.63, which was its highest close since June 2008.

According to a panel of City and business professionals, the next government should cut public spending this year, rather than waiting until 2011. The majority of the panel believed that cuts should start shortly after the May general election, due to concerns over the UK’s £178bn budget deficit. Between November and January, the number of British job seekers fell by 33,000. However the number of Brits in work fell by 54,000 over the same period. The Chartered Institute of Personnel and Development (CIPD) stated that “Jobless young people are thus turning to study in their thousands to avoid the dole.”

Due for release today is the GBP Public Sector Net Borrowing.

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