Chancellor Rachel Reeves announced a change in fiscal rules in her Autumn Budget speech, raising taxes by £40bn and committing to investing in the UK economy for long-term growth. Despite initial market calm, concerns arose over the need for increased borrowing of £32bn annually to fund the £70bn spending increase, leading to a rise in gilt yields and a slight dip in UK equities. The Bank of England’s potential response to the larger-than-expected fiscal event is being closely monitored by investors, impacting rate-sensitive sectors while benefiting banks.
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