Hammond Left Red Faced Following National Insurance U-Turn

Wednesday, 15th March:  Polling stations in the Netherlands opened this morning as 13 million voters are expected to cast ballots before 8pm (GMT) this evening. The race is dominated by the current PM’s centre-right party and Geery Wilders, of an anti-Islam and anti-EU opinion . According to a national broadcaster, by 9.30am, turnout was at 15%, 2% ahead of the previous parliamentary election in 2012. Further during the day, turnout had increased to 33%, vs 27% last time out. The outcomes has been unclear in the run up to the elections, with 40% of voters undecided as polling stations opened, and only a 4% margin between the leading candidates.

UK unemployment has fallen by 0.1% to 4.7% in the 3-months November-January, making it the lowest rate in over four-decades. Employment rose by  92,000 according to latest data from the Office for National Statistics. However, wage growth slowed from 2.6% to 2.3%, which despite still being above the UK inflation rate, pressure on wages is beginning to show. The Bank of England dropped interest rates in August 2016 following the UK’s decision to leave the EU, and will assemble tomorrow to hold their next interest rate policy meeting, where expectations are for rates to be kept on hold. However, wage growth is one of the most important pieces of data the BoE look at when decided interest rates going forward.

Remember last Wednesday’s Spring budget from Chancellor Phillip Hammond? Announcing plans to increase National Insurance levels for self-employed people just 7 days ago, he has faced criticism as the actions go against a 2015 manifesto pledge. The raise in NI contributions had been part of steering the UK through Brexit negotiations, due to come in to force in April 2018, impacting 4.8m self-employed workers. The announcement of the backtrack came just before Prime Minister’s Questions at noon today, where PM Theresa May defended the week old announcements.

In UK markets, the blue-chip index was driven higher by Hikma Pharmaceuticals, who although reporting a 29% fall in net profit, still beat both management and market expectations. The fall comes vs tough comparables in 2015. The shares surged >8% higher intra-day, closing +8.04%. The FTSE 100 ended the day +0.15%. As European markets shut up shop for the day, focus turns to Janet Yellen and the FOMC meeting this evening, where a rate rise is largely expected. Yellen’s press conference will follow after.