Page last updated at 20:59 GMT, Monday, 22 March 2010

Budget 2010: Markets' reaction

Financial markets have recovered significantly since the start of the global financial crisis.



The FTSE-100 is now back up to pre-crisis levels, and there seems to be some stability in the markets after the huge loss of confidence seen at the end of 2008 and the beginning of 2009.

That reflects increased optimism about the strength of the economy.

The UK has to demonstrate to investors that it continues to be a place to invest and do business, and any chancellor's Budget has to sustain that confidence.

Another indicator of investor confidence in the UK is the strength of the pound.

Pound versus dollar

As the country fell into recession, the value of the pound plummeted from a high of nearly $2 to below $1.40 in the early part of 2009.

It has since recovered, but the prospect of a slow economic recovery with a long period of low interest rates, has brought further falls in recent months.

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