GBP/CAD: Pair Jumps as UK PM Pledges Support for Businesses

GBP/CAD has been volatile on Monday, as UK Prime Minister Boris Johnson pledged to end the Brexit uncertainty if elected. The pair has gained over 0.50% to the daily peak, but it recently declined as investors are digesting the messaging from a conference organized by the Confederation of British Industry (CBI), which gathered leaders of both Conservatives and the Labour Party, including Johnson and his rival Jeremy Corbyn.

Currently, one British pound buys 1.7110 Canadian dollars, up 0.37% as of 11:04 AM UTC. However, the pair is super volatile right now, so it might end up higher at the end of the session.

The Loonie awaits relevant updates on the trade deal between the US and China.

UK PM Announces Measures to Support Businesses

Earlier today, Johnson spoke at the CBI conference, saying that he would implement a series of measures to boost domestic businesses, including:

• A business rates cut aimed at small businesses — the business rate will be slashed as part of a fundamental review.
• A jobs tax reduction — the national insurance pays will be cut by 1,000 pounds for more than 500,000 employers.
• A construction tax cut that will touch upon the purchase, construction or leasing of a building. The tax relief will be increased by 1%.
• A research tax cut.

Johnson’s decision to support small companies comes amid CBI director general Carolyn Fairbairn’s fears that the PM’s stance on immigration could hurt businesses. When asked about CBI’s concerns, Johnson said that his Brexit deal protects the needs of companies and industry. Also, the PM doesn’t oppose immigration. However, he wants a democratic control. He gave the Australian approach towards immigration as a great example.

However, while Johnson announced a series of tax cuts, he postponed the corporation tax. Markets expected the tax rate on corporate profits to be cut to 17% from the current 19%, but the PM said he would leave the tax rate at the same level to save for other domestic priorities, including the NHS.

“I hope you understand that it is the fiscally sensible thing to do,” he said.

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