Budget no help to curb strong £

4 July 1997

Budget no help to curb strong £

THIS weeks Budget will do little to help reduce sterlings strength, according to agriculture director for the Midland Bank, Norman Coward.

Although most European farmers are doing well, the UK agricultural industry is suffering the effects of a strong £. "What has the chancellor done to reduce the risk of further interest rate increases and, hence, the possibility of sterling staying high or going even higher," asked Mr Coward?

The budget contained little to start the £ falling back, he argued. "Theres a risk interest rates may have to increase further (in order to dampen consumer spending).

"The chancellor has applied some pressure in the form of a reduction in MIRAS (Mortgage Income Relief) relief and the increase in road and fuel tax. But whether spending will slow down will depend on the extent to which building society members, who are currently benefiting from windfalls, spend rather than save that cash."

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