UK Autumn Budget Delivers Neutral Fiscal Stance, Little Impact on BOE Rate Hike Bets

• UK Autumn Budget on October 28 deemed broadly neutral.
• Budget has estimated GBP 1.3 billion impact on public finances.
• Little effect on inflation or BOE rate hike pressure.
• BOE November 25 bps hike still highly expected.

The UK Autumn Budget, delivered by Chancellor Healey on October 28, presented a broadly neutral fiscal stance, with an estimated GBP 1.3 billion impact on public finances. Economists noted limited fiscal headroom due to elevated debt interest costs, with the budget offering modest tax adjustments and targeted investment rather than significant stimulus. Despite measures to ease cost of living pressures, particularly for energy, the country’s fiscal watchdog indicated these would have minimal effect on overall inflation. Consequently, analysts suggest the budget does little to alleviate pressure on the Bank of England (BOE) regarding future interest rate decisions. Traders continue to price in high odds of a 25 basis point rate hike at the BOE’s November meeting, with expectations for a further hike in December remaining significant.