Overview
- Sterling dropped to about €1.13, the weakest since May 2023, and to a three‑month low near $1.32 before paring some losses.
- Reports indicate the Office for Budget Responsibility plans to cut its productivity forecast by roughly 0.3 percentage points to be set out at the Budget.
- The Institute for Fiscal Studies says each 0.1 percentage point downgrade adds around £7bn to borrowing, implying a £20–22bn shortfall that could require tax rises or spending cuts.
- Chancellor Rachel Reeves wrote that she will not simply accept gloomy projections and framed investment as the route to stronger productivity.
- Investors are reducing pound exposure ahead of the Bank of England’s November 6 decision, where rates are expected to stay at 4% alongside new forecasts.