British finance minister John Healey announced a cautious budget, with £15 billion of fiscal headroom, down from £23.6 billion in March. The 10-year government bond yield fell 2 basis points, the FTSE 100 rose 0.1% and Lloyds, Barclays and NatWest shares gained 3.3% to 3.6% after a smaller-than-feared bank tax hike.
John Healey announced a cautious budget with support measures for households and businesses, while seeking to avoid adding pressure from the bond market on Prime Minister Andy Burnham’s government. Fiscal headroom was £15 billion, in line with expectations from a Reuters poll but below the £23.6 billion recorded in March.
Britain’s 10-year government bond yield fell 2 basis points to 5.323%, and its 30-year yield fell 3 basis points to 5.711%. The FTSE 100 rose 0.1% and the domestically focused FTSE 250 gained 0.4%. Lloyds, Barclays and NatWest shares rose between 3.3% and 3.6% after the tax increase on bank profits was smaller than feared.
Investors and analysts described the budget as cautious and broadly reassuring for markets. The article cited a cut in next year’s growth forecast from 1.6% to 1%, a £20.4 billion investment programme and a £100 energy payment for households.
