UK Autumn Forecast Statement

In a packed House of Commons, the Chancellor confirmed the two changes to the fiscal framework that she had announced a week earlier in the Financial Times and at an IMF meeting in Washington DC, namely a ‘stability’ (or deficit) rule and an ‘investment’ (or debt) rule. The former states that the current budget must move into balance by 2029-30 and from thereon must remain in balance by the third year of the rolling forecast, while the latter states that debt as a share of GDP must fall by 2029-30 of the rolling forecast. This reform ...

The market reaction to one of the most highly anticipated UK budgets in recent years was always going to be closely followed. While the impact was some distance from the catastrophic mini-budget of 2022, there was still a degree of concern, surprise and unease among investors. UK government bond yields actually eased heading into the UK budget announcement. The yield on the 10-year gilt dropped to 4.2% from the peak of 4.4% on Tuesday as Chancellor of the Exchequer Rachel Reeves began outlining £40bn of tax rises and plans to balance ...

U.K. borrowing costs posted two days of gains right after the Labour government unveiled a huge package of borrowing and tax rises in its Wednesday budget — but analysts downplayed the possibility of a second “mini-budget” crisis in the British bond market. The 10-year gilt yield , representing medium-term borrowing costs for the government, was slightly lower on the day at 11:20 a.m. London time. It still reached 4.431%, up from around 4.3% ahead of Wednesday’s budget. The 2-year gilt yield had risen from around 4.2% on Wednesday to ...

Chancellor of the Exchequer Rachel Reeves sought to reassure the financial markets after her budget on Wednesday triggered a selloff in UK bonds, saying that the “number one commitment” of the Labour government is “economic and fiscal stability.” “We have more headroom than the previous government left us, and that is important,” Reeves said Thursday in a Bloomberg TV interview. “We have now put our public finances on a stable and a solid trajectory.” She also pointed to an endorsement of her plans issued Wednesday by the ...

Overview: The main move in the foreign exchange market today is the recovery of the yen following what was seen as hawkish comments by BOJ Governor Ueda. Otherwise, the tone is one of consolidation. The equity market sell-off today may be weighing on the Scandis and dollar-bloc currencies amid risk-off impulses. Emerging market currencies are mixed. The Mexican peso, which fell to a new low for the year yesterday, is stabilizing today and is among the stronger emerging market currencies.. Only China's CSI 300 of the large markets in ...

Financial markets have been on a wild ride since the announcement of the UK’s latest budget. Big tax rises are coming, but not as quickly as big spending increases. And the prospect of higher growth has led investors to curtail expectations for Bank of England rate cuts. Markets initially liked the tax hikes, but quick spotted the higher borrowing projections: UK Chancellor Rachel Reeves has delivered the new Labour government’s budget, and if she was hoping for a smooth reception in financial markets, so far it has been anything ...

Over 3 million workers will receive a pay boost after the Chancellor confirmed the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – which is worth £1,400 a year for an eligible full-time worker – is a significant step towards delivering the manifesto commitment to make sure the minimum wage is a genuine living wage. The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. This £1.40 increase will mean ...