March 8, 2017 / 1:11 PM / 5 months ago

UK budget speech steadies sterling

2 Min Read

LONDON, March 8 (Reuters) - Britain's pound recovered from morning losses on Wednesday to turn briefly flat on the day against the euro and regain a foothold against the dollar as finance minister Philip Hammond delivered his 2017 budget statement.

The pound, under pressure from signs of flagging consumer demand and nerves over upcoming Brexit negotiations, started gaining as Hammond began speaking in parliament and rose further after he upgraded some official economic and budget forecasts.

By 1259 GMT, it traded 0.2 percent lower on the day at $1.2177, up almost half a cent from the day's lows. It was marginally lower on the day at 86.67 pence per euro.

Britain's main FTSE exchange was broadly unchanged since the start of the budget speech, down 0.2 percent on the day.

"The pound has risen off its lowest level against the dollar since mid-January in the past few minutes after chancellor Philip Hammond announced upgrades to the GDP forecasts," said David Cheetham, chief market analyst with retail broker XTB in London.

"Mr. Hammond has also stated that public borrowing will decrease significantly in 2017 to 51.7 billion pounds from the 68 billion seen previously in another development that has caused a mildly positive reaction." (Writing by Patrick Graham, editing by Nigel Stephenson)

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