UK Budget: What to Know Before Labour’s Announcement
Published On Oct 28, 2024, 12:01 AM
The Labour Party government in the UK is preparing to announce a budget characterized as 'painful', with warnings about potential tax increases and spending cuts. Although the Prime Minister and the Chancellor of the Exchequer have promised not to raise taxes on working people or return to austerity, they face significant pressure to manage debt levels and increase public service investments. Economists suggest the government is in a difficult position, needing to balance its campaign pledges with the realities of the current economic environment.
Stock Forecasts
VPU
Positive
The UK's economic challenges may lead to increased volatility in the stock market, particularly in sectors reliant on government spending. However, investments in defensive sectors such as utilities and consumer staples could provide some cushion. Investors might consider ETFs that focus on these sectors.
EWU
Negative
The uncertainty around the budget and the potential for tax increases could lead to bearish sentiment in broader UK equities, particularly among growth stocks which may suffer from tighter fiscal policy. This makes UK-focused ETFs less attractive in the short term.
Related News
Britain Braces for ‘Painful’ Budget Meant to Recharge the Economy
Oct 28, 2024, 12:01 AM
The new Labour Party government said it had inherited a challenging financial position and warned of tax increases and spending cuts when it reveals its budget this week.
Budget 2024: Reeves considers income tax threshold freeze
Oct 19, 2024, 12:50 AM
Government sources insist the move would not constitute a breach of Labour's manifesto tax pledge.
Utilities outperform the broader markets amid enthusiasm over AI electricity demand
Oct 18, 2024, 1:57 PM
Utilities is on fire this year. Here's what's driving the demand.