Reported by The Guardian
The pound is steady and gilt yields dipped, a day after John Healey delivered a cautious set of tax and spending plans in his maiden budget to help households hit by “global economic storms,” as he put it, which had little impact on markets.
The stock market has risen, with the FTSE 100 index 42 points ahead at 10,736, a 0.4% gain. Shell is the top riser, up 3.2%, after profits in the latest quarter doubled.
Sterling – the best performing major currency against the dollar this month with a 0.5% gain – dipped 0.1% against the greenback to $1.3310. It has gained a similar amount against the euro in October.
More from the original report
Government borrowing costs also eased. The yield on the 10-year benchmark gilt dipped 3.7 basis points to 5.308% this morning while two-year, five-year and 30-year yields are also down.
Jonas Goltermann , chief markets economist at Capital Economics, said the “No harm” budget has kept gilts out of the firing line.
double quotation mark The UK budget announcement has proven the non-event that newly-minted chancellor Healey had signalled in advance. While his first budget is hardly inspiring, it contrasts favourably with the initial efforts of some of his recent predecessors. By sticking to a gradual fiscal tightening path, and to the expectations set over the past couple of months for a muddle-through budget, Healey has probably done enough to keep the gilt market on side for now.
We think that gilt yields will fall over the coming year as the UK’s fiscal risk premium remains contained and the Bank of England policy takes a less hawkish path than money markets discount.
The chancellor said he will raise taxes on banks, gambling, savers and landlords , while also tightening VAT rules for online marketplaces. Its £4.4bn cost of living support package has been criticised as “badly targeted” by the Resolution Foundation this morning, though.
Speaking on BBC radio 4’s Today programme this morning, Healey vowed to cut the welfare bill before the next election, with a “tough” approach to young people who do not accept support to get a job…