Overview
- Franklin Templeton’s David Zahn cautioned that a disappointing package could drive gilt yields sharply higher and compel a secondary budget, calling 6% on 10‑ and 30‑year bonds unsustainable.
- Reeves has reportedly ruled out raising income tax rates and is expected to rely on threshold freezes and a bundle of smaller or targeted tax measures.
- Reports from meetings with Labour MPs indicate plans for higher property charges dubbed a “mansion tax,” while Greens and campaign groups push for wealth and property‑focused taxes.
- Markets are on edge, with 10‑year gilts in the mid‑4% area, 30‑year in the mid‑5% range, sterling near multi‑month lows, and bank shares and domestic sectors sensitive to fiscal signals.
- Major investors say the Chancellor should expand fiscal headroom beyond the roughly £10bn previously signaled, with calls for buffers north of £20bn to reassure bond buyers.