UK’s stake in Royal Bank of Scotland with markets roundup | Calamatta Cuschieri

Markets summary

European Markets closed mixed on Wednesday amid the unveiling of the United Kingdom's autumn budget. The non-partisan Office for Budget Responsibility slashed its estimates for economic growth in the UK, as well as revised down productivity growth and business investment. Chancellor of the Exchequer Philip Hammond told lawmakers £3 billion would be set aside for the country's withdrawing from the European Union.

The DAX declined 1.16% as Infineon fell 2.79%, followed by Adidas losing 2.42%. The CAC 40 closed 0.25% lower led by losses in electronics manufacturer STMicroelectronics. The FTSE 100 gained 0.10% at the close. The euro was up 0.46% against the dollar at one point, going for $1.17927, while the pound was up 0.45% versus the greenback, buying $1.32942

Currency corner

Weakened orders for durable goods registered in the report for last month by the United States Department of Commerce put downward pressure on the greenback. The support for the dollar was also weakened as the Thanksgiving holiday weekend is nearing. The euro was up 0.46% against the dollar at one point, going for $1.17927, while the pound was up 0.45% versus the greenback, buying $1.32942. The pound defied the drop in official economic growth rate forecasts for the United Kingdom, against the abolishment of the stamp duty for the purchase of the first home.

Selling the stake in Royal Bank of Scotland

United Kingdom's Chancellor of the Exchequer Philip Hammond announced that his government will start selling its £24 billion stake in Royal Bank of Scotland (RBS) by March 2019. The decision to begin selling the 71% stake in RBS acquired following the 2007/2008 financial crisis coming just a few weeks after the bank stated it will settle its multi-billion dollar fine with the United States Department of Justice for misselling mortgage securities this financial year.

Earlier during the day, the Treasury stated in its Budget that it "intends to recommence the privatisation of RBS before the end of 2018‑19 and to carry out over the forecast period a programme of sales expected to dispose of around £15bn worth of shares, which represents around two-thirds of our stake at current market prices." However, Chancellor Hammond had previously said that the government will not begin selling its stake before RBS agrees on the size of fine with the US Department of Justice, which is estimated to be as high as $12 billion.

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