We’re just over a week away from a highly anticipated UK Budget from new Chancellor Healey. The surprising lack of leaks in recent weeks makes this the least predictable Budget in years.
A month ago, we took our stance in Betting Against the Budget, saying that the move higher in yields and the cut to headroom made it very likely for the fiscal announcements to disappoint investors.
UK assets, including GBP, have held up well so far, partly because no policy balloons have been sent up. That being said, Healy has drip-fed some details over the past week, but ultimately we struggle to see the Budget giving a meaningful boost to risk assets.
In terms of a probability-based outcome, we lay out below the chances of a non-event/kicking the can down the road, versus other more negative outcomes.