In a bid to pressure lawmakers to pass legislation for a new budget that has been delayed for more than a month, Governor Arnold Schwarzenegger has declared a fiscal state of emergency. California’s economy, which is the eighth largest in the world, faces a budget deficit of $19bn (£12bn).
Source: BBC News
The new coalition government for the U.K. will publish its emergency budget on June 22nd which could set the tone for the medium term direction for the Pound. A solid plan to reduce the budget deficit which in May was 8.5 billion less than expected could extended the current bullish trend.
The British Pound is in focus ahead of monthly budget figures set to show the second-largest shortfall in a year, underscoring the economic slowdown ahead as the government tackles the yawning deficit.
As the ballooning budget deficit in the U.K. drags on the long-term outlook for the economy, a record rise in public sector borrowing could spark increased volatility in the exchange rate as investors weigh the prospects for future growth.
As the new coalition in the U.K. aims to tackle the ballooning budget deficit, the central bank is widely expected to support the economy going into the second-half of the year as policy makers continue to see a risk for a protracted recovery.
