The British pound gained on Tuesday as British Chancellor of the Exchequer Phillip Hammond raised U.K. growth forecasts and predicted inflation to reach target over the next 12 months.
The OBR revised up its growth forecasts for 2018 from 1.4 percent to 1.5 percent, where the rate will ease to 1.3 percent in 2019 and 2020 before strengthening again to 1.4 percent then 1.5 percent in 2021 and 2022.
Regarding inflation, the watchdog predicts inflation to retreat from the current high levels, above 3 percent, to 2 percent over the next 12 months.
Hammond says he is on course to increase public spending in the autumn budget.
Borrowing forecast for 2017-18 £45bn, £13bn less than forecast a year ago and £4bn less than Autumn forecast.
Borrowing will reach 2.2 percent in 2018-19 then retreats gradually until reaching 0.9 percent in 2022-23.
In 20108-19 budget, there will be a surplus on the current account, Hammond said.
Hammond said “substantial progress” has been made in the Brexit talks, where he is looking forward to making another step forward at next week’s EU summit.
The Treasury will today publish information about how £1.5bn set aside for Brexit planning will be spend, Hammond said.
As of 12:53 GMT, the pound strengthened to $1.3956, set for its third
straight daily gain after buoyant remarks from Hammond.