A look at the day ahead in European and global markets from

Vidya Ranganathan

Britain's government gets another report card on its

efforts to curtail spending while Germany, in contrast, goes for

a final vote on its big borrow-to-spend splash on Friday.

The UK government finances report should show how deeply in

the red the government is as the financial year draws to a close

and just days ahead of finance minister Rachel Reeves's budget

update on March 26.

Government departments have been tightening their purse

strings to help Reeves meet her budget reduction goals, which

have been trammelled by rising gilt yields and a slowing

economy.

Last week, British Prime Minister Keir Starmer pledged to

"hack back the thicket of red tape" suffocating the economy and

the British government abolished NHS England, bringing the

health service back under direct ministerial control.

Reeves has set herself an ambitious target of balancing

day-to-day spending and tax revenues by the 2029-30 financial

year. She is expected to announce she has rebuilt a 9.9 billion

pound ($12.83 billion) fiscal buffer, Bloomberg reported on

Wednesday citing an unnamed source.

In Germany, on the other hand, investors have been

celebrating the almost certain passage on Friday of legislation

to create a 500 billion euro ($542 billion) fund for

infrastructure and higher spending on defence.

The plan was approved this week in the lower house

Bundestag, giving conservative leader and chancellor-in-waiting

Friedrich Merz a huge boost and investors reason to hope for a

recovery in Europe's largest economy.

The legislation goes today to the Bundesrat upper house but

appears certain to pass there.

Meanwhile in broader markets, Wall Street's bullish

momentum earlier this week, inspired by Federal Reserve Chair

Jerome Powell's view that the economy is in good shape and

tariff-related price rises will be transitory, seems to have

fizzled out.

Treasuries and the dollar are up, indicating a broader

"risk-off" tone at play, as is gold, which has already rocketed

16% this year to record highs.

Policymakers across the globe have struck a cautious note in

a week filled with central bank meetings as uncertainty in

global economics and politics grew. The U.S. Federal Reserve,

the Bank Of Japan and the Bank of England all held rates steady.

Key developments that could influence markets on Friday:

DATA: UK public finances (February), Euro zone current

account (January), Euro zone consumer confidence (March, flash

estimate), Canada retail sales (February)

SPEAKERS: Chicago Fed President Austan Goolsbee, New York

Fed President John Williams, European Central Bank's Jose Luis

Escriva at an event in Barcelona.

($1 = 0.9221 euros)

($1 = 0.7719 pounds)