Pound Sterling to US Dollar (GBP/USD) Exchange Rate firms following Osborne’s budget

The GBP to USD exchange rate strengthened on Wednesday, wiping out yesterday’s losses as Chancellor of the Exchequer George Osborne said that the UK economy will grow more than expected this year.

The comments, said during today’s budget, saw the Pound recover from a three-month low against the single currency and tick higher against the majority of peers. The chancellor said that the UK economy will grow by 2.7% this year, more than previously forecast and said that the nation was on track to make a strong recovery if his plans were followed.

The office for budget responsibility revised up its forecasts for UK economic growth. It now sees the economy growing by 2.7% this year, up from the previous forecast of 2.4%. GDP is expected to expand by 2.3% in 2015 and by 2.6% in 2016 and 2017. Osborne also said that the UK economy is performing better than Germany and USA to make it the best performing economy in the world.

Economists raised their bets that the Pound will strengthen further throughout the year with some predicting that the GBP/USD could reach as high as $1.74 by the end of June and is likely to end the year around $1.63.

Earlier in the session the Bank of England’s Monetary Policy Committee published the minutes for its March meeting.

“Sterling had appreciated by another 1.5% during the month, and it was possible that this gradual appreciation would continue if prospects in the U.K. continued to be seen as increasingly favourable relative to those of its main trading partners,” the Central Bank said in the minutes.

The Pound was also receiving support from data which showed that the number of people in work climbed to a new record high and the number of people claiming unemployment benefits fell.