Live Markets: UK Budget: the backlash begins
03/12/2025 12:21
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UK BUDGET: THE BACKLASH BEGINS
UK finance minister Rachel Reeves' Budget last week managed to keep British markets steady but some investors and analysts believe this may not last.
Premier Miton, a UK wealth manager, said in a statement that it was reducing exposure to domestic stocks because the budget did not incentivise investment in Britain’s economy or financial markets.
CIO Neil Birrell said:
“We held an asset allocation meeting the day after the budget and posed the question ‘what did the budget do to increase the likelihood of domestic or international corporates investing in the UK or any financial investors buying UK assets?’”
“The answer from a range of experienced investors in bonds, UK equities, global equities, property companies, alternatives and multi-asset was very little or nothing, indeed, possibly the opposite. The one exception was demand for UK real estate, particularly central London property.”
Meanwhile, as Reeves and Prime Minister Keir Starmer defend accusations that pre-budget communications portrayed Britain's fiscal position as worse than they knew it to be, consultancy Capital Economics is warning of a gilt market fallout if speculation about a leadership change takes hold.
Capital Economics’ deputy chief UK economist Ruth Gregory wrote that should the two eventually be replaced by more left-leaning lawmakers,
benchmark 10-year gilt yields could exceed 5% - a level not seen since 2008 - as extra public spending and borrowing loosened Britain’s “fiscal guardrails.”
(Naomi Rovnick)
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EUROPE'S BUDGET HEADACHES CLICK HERE
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