Sterling inches lower ahead of highly anticipated UK budget
TLT•Sterling fell 0.1% against the dollar to $1.329 and 0.1% against the euro to 83.7 pence ahead of the UK budget. Forecasters put fiscal headroom at about £15 billion, and banks, gambling firms and online marketplaces are expected to face higher taxes.
1. Sterling edges lower
The pound dipped ahead of Finance Minister John Healey’s budget announcement in parliament, expected just after 1230 GMT. Healey is expected to outline how the government plans to raise revenue for growth spending, including on defence and artificial intelligence, while addressing high living costs.
2. Budget and bond concerns
Banks, gambling firms and online marketplaces such as Amazon and Temu are expected to face higher taxes as budget forecasters put fiscal headroom at about £15 billion. Matthew Ryan of Ebury said spending increases looked set to be modest and funded by reallocating money rather than extra borrowing. The 30-year gilt yield rose 2 basis points; Healey has said he would stick to the government’s fiscal targets.
