By Leigh Smith

Yesterday, Chancellor of the Exchequer Alistair Darling addressed the House of Commons with his pre-budget report. This was seen to be the main influencer of Sterling exchange rates, and in turn the cost of sending money overseas or selling foreign currency. But what did the report contain?

The main positive seen for the Pound was news that there would be no windfall tax on bank profits, on the back of this alone we saw Sterling rally during the early stages of the report.

However, Darling announced that National Insurance contributions will rise in April 2011, on top of the increase already released in last year’s report. Value Added Tax (VAT) will revert back to 17.5% from January 2010. Banks will be charged a one off 50% tax levy on all bonuses paid out over £25k. These three key policies were all seen as negative measures and heaped pressure on the Pound, even though they look set to raise over £13.5bn for the Government. The problem being this amount will only cover public spending, and not cut the debt deficit.