The pound soars after the optimism of the IWC report

The pound rises more than half a percentage point this Wednesday against the euro and the dollar, after an optimistic survey by the Confederation of British Industry (CBI) and evidence that the new government is rapidly increasing spending ballast, plus the expectations of a cut in interest rates by the Bank of England.

At 13:28 hours (CET), the GBP / USD rises 0.5% to $ 1,3111, after reaching intraday highs at $ 1,3124, while the EUR / GBP pair leaves 0.5 % up to 0.8449.

The need for net cash from the public sector increased to 16.6 billion pounds in December, as the Government raised the salaries of nurses and other public sector workers, a sign that the UK’s fiscal policy is likely to be significantly more favorable to the economy this year while the government implements its expensive electoral promises. That should reduce the need for monetary stimulus, if the rest remains as it is.

And more importantly, the IWC monthly survey of companies in the manufacturing sector has indicated that the greatest improvement in confidence over the past six years has occurred in these three months, despite the fact that production has continued to suffer as a result of the decline in car production.

“With the improvement of business optimism at its fastest pace since 2014 and the reduction of investment plan restrictions, it is clear that manufacturers are entering the new year with a light step,” said the CBI deputy chief economist , Anna Leach, in a statement.

“Companies now plan to invest more in plants and machinery, which will ultimately help increase capacity and production.”