The British pound held above $1.33 on the day after Finance Minister John Healey presented a cautious budget, outlining tax and spending measures aimed at supporting households he said were facing “global economic storms.” Healey reiterated the government’s commitment to its fiscal rules, announcing tax rises on banks, gambling, savings, and landlords, as well as tighter VAT rules for online marketplaces and targeted support to help households cope with higher energy bills.
He also indicated that the government would draw on part of its fiscal buffer—now estimated at £15 billion, down from £24 billion previously—to meet its main fiscal target, while still pursuing the repair of public finances despite the economic repercussions of the Iran conflict. The budget had little impact on market expectations ahead of next week’s Bank of England policy meeting. Money markets continue to fully price in a rate increase on November 5, with a second hike anticipated by February.
