The British pound held below $1.33, hovering near a two-week low as investors digested UK Chancellor John Healey’s inaugural budget. Healey reiterated his commitment to the government’s fiscal rules, with the Office for Budget Responsibility estimating fiscal headroom at £15 billion for the 2029–30 fiscal year, broadly in line with expectations.
Key measures included energy bill support, bank taxes that were raised by more than had been anticipated, the suspension of tariffs on over 100 supermarket products, and a 3.9% increase in the minimum wage. The budget also earmarked an additional £20.4 billion for the National Wealth Fund and the British Business Bank to bolster investment and support 140,000 jobs.
On the economic outlook, the OBR cut its 2027 GDP growth forecast to 1% from 1.6%, citing the impact of the war in Iran on energy prices, while nudging up its 2026 projection to 1.2% from 1.1%. Forecasts for government borrowing and public debt were also revised higher, darkening the overall fiscal outlook.
