Pound extends losses as Chancellor Reeves reveals budget

forex4you · Oct 30, 2024, 06:51 pm

Pound extends losses as Chancellor Reeves reveals budget

This budget raises taxes by GBP40 billion
We will maintain BOE's 2% inflation target
OBR says budget will boost long term growth
Will balance budget in third year
Confirms earlier reported rise in minimum wage
Will 'catalyze' 70 billion pounds through new National Wealth Fund
Will increase employers' national insurance contribution by 1.2 percentage points
Will reduce threshold for paying national insurance to 5000 pound by employers
Capital gains tax: lower rate will rise to 18% from 10%, higher rate will rise to 24% from 20%
Capital gains rise will raise GBP2.5B
Inheritance tax threshold freeze to be extended by 2 years
Will increase soft drink levy, will introduce tax on vaping liquids
Will cut duties on draught beer in pubs
Will abolish non-domiciled tax regime
Will introduce a residence based regime
Non-domiciled tax regime will raise 12.7 billion over next five years
Will raise tax on private equity carried interest to 32%
Energy wildfall tax will rise to 38%
Stamp duty on second homes to rise 2 percentage points
Fuel duty will be frozen for another year
Puts VAT on private schools and removes their business rates relief

Looking at the GDP forecasts changes from March:

For CPI changes from March:

The CPI forecasts are notably higher but the pound is at the lows of the day, down 77 pips to 1.2940. This is Labour's first budget in 15 years.

This article was written by Adam Button at www.forexlive.com.

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