Sterling rises against the euro after Osborne says reducing the deficit is top priority

- Markets gave Osborne "the benefit of the doubt this morning"-

Date: May 24, 2010

Sterling rose against the euro in trading this morning after George Osborne outlined £6.2 billion worth of cuts which will be used to reduce the UK’s burgeoning budget deficit. Sterling rose 1.2 pc to 85.91 pence against the euro. Against the dollar it traded at $1.4459, from $1.4460 last week.

Mark Bolsom, Head of the UK Trading Desk at Travelex Global Business Payments said, “These cuts have been designed to reassure the markets and show that the government intends to tackle the deficit as a matter of urgency. They are a step in the right direction and this has supported sterling.

“At the moment, the markets are giving Osborne and his team the benefit of the doubt. Concern about the state of the UK finances is being held at bay as they wait to see how serious he is about eliminating the debt. These cuts have bought Osborne some time and the markets will now be looking towards the budget on the 22nd June.”

Bolsom continues, “The Coalition are treading a fine line – cutting too much could arguably push us back into recession by suddenly withdrawing the very economic stimulus that helped pull the UK out. Nobody is sure at the moment just how sustainable the recovery is.”

- Ends -

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Jessica Buttress
Head of PR for Travelex Global Business Payments UK
0208 415 4204
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Jessica.buttress@travelex.com

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Founded in 1976, Travelex is the world’s largest non-bank foreign exchange and payments specialist; with operations across four continents and 6,000 employees worldwide.

Travelex holds key positions in its three main areas of activity: Global Business Payments (TGBP, which includes Travelex Personal Payments), Currency Services and Card and Mobile Payments. Every year, more than 35,000 corporate clients and 30 million customers trust Travelex to manage their foreign exchange requirements.

Recently recognised by TowerGroup research as Industry Leader for payments innovation for SMEs, Travelex currently handles international payments worth £40 billion annually for over 750 large corporate and financial institutions.

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