Upon headlines that the OBR is assessing that the UK is in recession and some jeers in parliament as Hunt says that they will "not leave debt to the next generations", the pound dipped with cable falling to a low of 1.1801 on the day. The details of the budget are what you would expect (I'll summarise below) but cable did recover as buyers hold on to its 100-hour moving average:
With the dollar still holding firmer on the day, this will be a test for GBP/USD after having seen other dollar pairs already return to a more neutral near-term bias as outlined here.
As for Hunt's budget, here are a couple of details to note:
- 45p tax rate threshold reduced from £150,000 to £125,140
- Maintains current levels of income tax personal allowance, higher rate threshold, main national insurance thresholds and inheritance tax thresholds for a further two years to April 2028
- Dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024
- Annual exempt amount for capital gains tax cut from £12,300 to £6,000 next year and then to £3,000 from April 2024
- To introduce new, temporary 45% levy on electricity generators i.e. windfall tax on low-carbon electricity generation
- Energy profits levy to be increased from 25% to 35% starting from January next year until March 2028