UK Budget / Kommentar PGIM

Die aktuelle Haushaltsdebatte in Großbritannien kommentiert Guillermo Felices, Global Investment Strategist für Fixed Income at PGIM:

This Budget was all about regaining confidence of both the market and labour MPs, and it is doing the minimum to achieve that. The market reaction is consistent with some confidence being restored, with gilts rallying and sterling stronger versus the US dollar and euro.

Overall, the Government has increased headroom by £22 billion (versus the £15 billion expected), introduced measures that will help inflation to fall further, and reduced cash requirements a bit, meaning that UK government debt issuance numbers will be more reasonable. This should pave the way for the Bank of England to cut rates, which is positive for gilts.

The key remaining uncertainties are the fact that the tax increases are backloaded so revenues will only be realised in the future; growth assumptions were trimmed lower, though are still very optimistic hovering at around 1.5% after 2027; and politically, I am not sure the Government has done enough, especially after freezing income tax thresholds. These uncertainties could easily come back to haunt the gilts market in the next few months.