The fear for the pound is that the March budget may prove to be a symbolic one

Author: Justin Low | Category: News

Sajid Javid's resignation shows that Boris Johnson means business ahead of the budget release on 11 March

The pound is rising after Javid's resignation as it looks to be a case of economics rather than politics - with Johnson wanting to unleash whatever proposals he have in mind during the budget announcement next month.

There is a lot of big talk about boosting infrastructure spending and public investments, but are we really sure his latest gambit is not a political one?

The thing about the pound getting hopeful from the news here is that traders are assuming this would mean the BOE probably doesn't have to step in to cut rates in order to bolster the economy, or at least they won't be needed to do so as much.

However, the real fear is that the UK economy may very well still struggle in light of post-Brexit trade uncertainty and that the March budget will prove to be a symbolic one - rather than one that is set up to save the economy from drowning.

As such, if any major rally in the pound is to come from the foundations of the headlines today, it is going to be one that is built on shaky ground. And we all know how that ends.

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