Finally, after days of sitting in limbo, Britain has a new Prime Minister and a new ruling party. What does it mean for the United Kingdom exchange traded fund (ETF), the broader situation in Europe and Britain’s own struggling economy?
Greece’s budget deficit gets all the attention, but Britain’s may actually be just as bad.
The latest numbers are out on the EU’s Spring economic forecast of its 27 member countries. Britain’s budget deficit has risen to about 12% of GDP and is now the largest in the European Union, reports XinhuaNet. Alleviating this debt will be the biggest and most important challenge of the new government. [U.K. ETF Set for a Spill?]
Britain’s new Prime Minister David Cameron took office yesterday and marked the end of decades of liberal rule in the country. He’s got his work cut out for him as he works to bring two dueling parties together. One major order of business is reducing Britain’s high unemployment rate of 2.5 million people now seeking work, reports John F. Burns for The New York Times. [Is the U.K. ETF on the Right Path?]
The United Kingdom ETF has struggled like most European-focused ETFs year-to-date. It’s down nearly 8% in that time. So far, the British market has greeted the new ruling party with yawns, sending stocks and the British pound lower. The markets there are waiting for more details about how the government plans to tackle the big issues before it reacts. [Euro ETFs: Out of the Woods?]
For more stories about Britain, visit our EWU category.
- iShares MSCI United Kingdom (NYSEArca: EWU)
- CurrencyShares British Pound Sterling (NYSEArca: FXB)
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.