ING analyst Chris Turner said the UK budget, due at 20:30 Beijing time, could be
positive for the pound and UK gilts and may narrow the UK-Germany government
bond yield spread. He said the UK is among the few G7 economies with fiscal
trajectories moving in the right direction toward 2027. With rising inflation
pushing more workers into higher income-tax bands, Turner expects the budget
deficit to come in below 4% of GDP. He added that unless the budget unexpectedly
includes growth-boosting fiscal measures that would shock gilts, EUR/GBP is
likely to remain under pressure and could fall toward about 0.8315.
