Markets stabilize ahead of UK budget announcement

By Roland Jackson, AFP

London, United Kingdom — European stock markets held steady on Wednesday as London waited on Britain’s budget and Frankfurt digested solid German data. London stocks turned flat as dealers sat on their hands before the government’s latest taxation and spending plans. Finance minister Philip Hammond, who is widely expected to exude caution as the country prepares to trigger Brexit, will unveil his spring budget before parliament at 1230 GMT.

Chancellor of the Exchequer Hammond, who took control at the Treasury following last June’s EU exit vote, is not expected to present any major surprises this time around, with Britain on the cusp of triggering Article 50 of the EU’s Lisbon Treaty by the end of March. “The market focus turns to the chancellor’s speech today, with the spring budget set to be delivered under the shadow of this month’s expected activation of Article 50,” said analyst Joshua Mahony at traders IG. “The uncertainty associated with the forthcoming Brexit negotiations means that Hammond is unlikely to go all out for now, instead holding back capacity to boost the economy if things turn sour down the line.” In eurozone deals meanwhile, Frankfurt stocks rose as official data painted a rosier picture of the currency bloc’s biggest economy. Industrial production in Germany grew 2.8 percent in January, preliminary data showed Wednesday, comforting fears that global economic uncertainty could put the brakes on activity. “After yesterday’s shocking new orders data, today’s industrial production data brings some relief for the German economy,” said ING Diba bank analyst Carsten Brzeski. Overall, trading in European stock markets was calm on Tuesday as investors waited on this week’s interest rate call in the eurozone on Thursday and crucial jobs data in the United States on Friday.