UK faces financial deficits and spending cuts

Britain's government will soon receive a report on its financial health as the fiscal year ends. This report will reveal the extent of the country’s deficit, just days before Finance Minister Rachel Reeves presents her budget update on March 26. Departments have been cutting costs to help meet budget goals affected by rising government bond yields and a slowdown in the economy. Prime Minister Keir Starmer recently promised to reduce the excessive regulations hindering economic growth. Additionally, the UK government has dissolved NHS England, bringing the health service directly under ministerial control. Reeves aims to balance daily spending with tax revenues by the year 2029-30 and is expected to announce a rebuilt fiscal buffer of around £9.9 billion. In Germany, the mood is more optimistic as lawmakers prepare to vote on a substantial spending package. This plan involves a €500 billion fund for infrastructure and defense. The lower house of the German parliament has already approved it, giving a boost to conservative leader Friedrich Merz. The upper house is also expected to pass the legislation. Meanwhile, U.S. markets have lost some of their earlier momentum. This change follows comments from Federal Reserve Chair Jerome Powell, who indicated that the economy is stable, but concerns about inflation remain. As a result, Treasuries and the dollar are rising, reflecting a cautious sentiment among investors. Various economic data are due on Friday, including UK public finances and Eurozone consumer confidence. Key central bank leaders will also be speaking at events, which could affect market movements.