Dutch International: Prior to the release of the budget, there may continue to be a risk premium for trading the British pound.

Francesco Pesole of the Dutch international group stated in a report that there may continue to be a moderate risk premium in pound trading until the UK budget is announced next Wednesday. He said that the government's reported 180-degree turnaround on income tax issues "has added a layer of uncertainty and made bond investors uneasy." The Dutch international group expects the euro to pound exchange rate to end the year at 0.88 pounds. The Dutch bank believes that the risk premium may decrease after the budget announcement, but expects that some of the premium will be replaced by increased expectations of a rate cut by the Bank of England. The euro fell by 0.2% against the pound to 0.8814 pounds, while the pound rose by 0.1% against the dollar to 1.3067 dollars.