Will The Emergency Budget Impact The Financial Markets?

One way of backing your judgement in the financial markets is via financial spread betting.

With financial spread betting you bet on margin which means you benefit from increased leverage. That is, you pay a small initial deposit (margin) and that allows you to take a larger position than you would be able to in say traditional shares trading.

The financial markets are influenced by a wide array of factors and it’s important that you understand what can have an influence on opinion.

From public institutions to private investors to home owners, there is a sense that most people in the UK are holding their breaths in advance of the emergency budget due on the 22 June.

The new Chancellor George Osbourne is expected to deliver extensive spending cuts and tax rises in the emergency budget as he seeks to pay-off the UK’s substantial 2009-10 budget deficit of £156 billion.

Not everyone agrees that spending cuts and tax rises are what the UK economy needs right now . The argument has become more exaggerated since the newly created Office for Budget Responsibility released a predicted economic growth figure of 2.6% in 2011 which was less than what the previous government had forecast. While more positively, it lowered its figure for total borrowing between now and 2015 by 22 billion, again less than many were expecting.

Some used these new figures as further proof that with forecast growth being weaker and borrowing not as much as expected this was definitely not the time for substantial cuts. 

Meanwhile, over in the other camp, the downgraded growth figures were the key and that showed the need to make even more spending cuts.

Whatever happens on June 22 it will be interesting to see the short- and long-term impact on the economy and the financial markets . After conflicting recent data, what will happen to house prices? Will sterling be bolstered or deflated and how will the FTSE 100 react ?

With financial spread betting it is easy for you take advantage of rising or falling markets . You can choose to ‘buy’ (go long) at the offer price, or, and this is an advantage over traditional shares trading, you can ‘sell’ at the ‘bid’ price (go short) .

One other major advantage of financial spread betting is that it is free from capital gains tax unlike traditional shares trading. It’s also exempt from stamp duty..

It’s always important to carefully manage your risk when financial spread betting and that means making use of guaranteed stops and stops and limit orders   .

A recent report by research organisation Investment Trends suggests that the largest spread betting company in the UK is IG Index. There is a huge range of markets to choose from: forex, indices and house prices to name but three. They also offer expert market analysis and commentary to help you increase your financial trading knowledge. Visit IG Index.

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