CFD Trading Rate Great Britain Pound vs US Dollar (GBPUSD)

• GBP/USD flat lines around 1.2950 in Tuesday’s early Asian session. 
• The Greenback loses ground in response to improved polling for Democratic candidate Kamala Harris. 
• The Bank of England is expected to cut interest rates at its November meeting on Thursday. 

The GBP/USD pair trades flat near 1.2950 during the early Asian session on Tuesday. Traders will closely monitor the outcome of the US presidential election. On Thursday, the attention will shift to the Bank of England (BoE) and the US Federal Reserve (Fed) monetary policy decisions. 

Meanwhile, the US Dollar Index (DXY), which tracks the USD’s value against six major currencies, broke below the 104.00 support and reached fresh two-week lows near 103.60 in response to improved polling for Democratic candidate Kamala Harris. 

Strategists said the USD weakness was linked to a poll by the Des Moines Register and Mediacom that showed Harris with a 47-44% lead over Trump in Iowa. 

The Fed's rate decision will take center stage on Thursday, which is widely expected to cut rates by a standard 25 basis points (bps) at the November meeting, rather than repeat the large 50 bps easing of its last decision. Fed Funds futures are pricing in over 80% chance of a December cut, while the swaps market is pricing in close to 50% possibility. 

On the GBP’s front, economists polled by Reuters forecast a quarter-point reduction in the benchmark rate to 4.75% at its BoE’s rate decision on Thursday. However, the longer-term outlook is less clear, with BoE governor Andrew Bailey unlikely to raise hope of another rate cut before the end of the year.

• GBP/USD approaches 1.3000 but remains capped by 100-day SMA.
• A close above 1.3000 may open path to 1.3042 and higher targets.
• Failure to break resistance could lead to 1.2884 support test and further declines.

The Pound Sterling trimmed some of last week's losses against the Greenback and registered gains of over 0.46% ahead of a busy economic schedule featuring US Presidential Elections. At the time of writing, the GBP/USD trades at 1.2971 after rebounding off daily lows of 1.2945.

GBP/USD Price Forecast: Technical outlook

After falling below September’s 11 swing low of 1.3001, the GBP/USD turned neutral to bearish bias, clearing on its way to the 50-day Simple Moving Average (SMA). During the day, the pair hit a daily high of 1.2998, but they could not crack 1.3000. The 100-day SMA at 1.2979 pulled the exchange rate lower.

For a bullish resumption, buyers must surpass 1.3000. Once cleared, the next stop would be the October 30 high at 1.3042, followed by the October 21 peak at 1.3057 ahead of 1.3100.

Conversely, if GBP/USD achieves a daily close below the 100-day SMA, further weakness could drive the exchange rate toward the November 1 low of 1.2884. A breach of the latter will expose October’s 31 swing low of 1.2843 before testing the 200-day SMA at 1.2809.

GBP/USD Price Chart – Daily

The Bank of England (BoE) is expected to lower its bank rate by 25 bps to 4.75% on November 7, DBS’ Senior FX Strategist Philip Wee notes.

BOE Governor to address monetary policy

“CPI inflation fell to 1.7% YoY in September, below the 2% target for the first time since Covid. However, core inflation remained high at 3.2% in September. BOE Governor Andrew Bailey should address monetary policy in light of the controversial Budget announced on October 31.”

“While the IMF backed Chancellor Rachel Reeve’s economic plan to boost public investment to drive growth, Moody’s warned that frequent changes to the fiscal rules could erode credibility. The Office for Budget Responsibility (OBR) reckoned the additional spending could provide a short-term lift to growth before crowding out business activity and investment and lifting inflation.”

“Following its knee-jerk sell-off to 1.2844 on the announcement, GBP/USD has stabilized above 1.29 on expectations of cautious BOE rate adjustments.”

The Pound Sterling (GBP) is likely to trade in a range, probably between 1.2890 and 1.2980. In the longer run, GBP must break and remain below 1.2845 before a sustained decline can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Rangebound between 1.2890 and 1.2980 for the time being

24-HOUR VIEW: “After GBP dropped sharply last Thursday, we highlighted on Friday that ‘The sharp drop appears to be overdone, and GBP is unlikely to weaken further.’ We held the view that GBP ‘is more likely to trade in a range, probably between 1.2860 and 1.2950.’ GBP did not weaken further, but instead of trading in a range, it rose to 1.2980, then pulled back to close at 1.2921. It opened higher today. The price action provides no fresh clues, and we continue to expect GBP to trade in a range, probably between 1.2890 and 1.2980.”

1-3 WEEKS VIEW: “Last Thursday, GBP plummeted to a low of 1.2845. In our update from last Friday (01 Nov, spot at 1.2900), we indicated that ‘While there has been a buildup in momentum, GBP must break and remain below 1.2845 before further sustained decline can be expected.’ We added, ‘The likelihood of GBP breaking clearly below 1.2845 will remain intact, provided that 1.2985 is not breached.’ In NY trade, GBP rose to 1.2980, then pulled back. Downward momentum has slowed, and the chance of GBP breaking below 1.2845 has diminished. However, only a clear break above 1.2985 would indicate that the downside risk has faded.”

• GBP/USD drifts higher to around 1.2970 in Monday’s early Asian session, up 0.40% on the day. 
• The USD remains under selling pressure amid weaker US NFP data, uncertainty around the US presidential election.  
• The BoE is expected to trim the rate by a quarter-point to 4.75%.

The GBP/USD pair jumps to near 1.2970 on the softer Greenback during the Asian trading hours on Monday. The US Dollar (USD) remains under some selling pressure after the weaker US Nonfarm Payrolls (NFP) data for October, which provides some support to the major pair. 

After delivering a 50 basis points (bps) rate reduction in September to start the easing cycle, the US Federal Reserve (Fed) is anticipated to cut its policy rate by 25 bps in the November meeting. Markets are pricing this outcome with a roughly 97% probability. The Greenback edges lower as traders brace for the US presidential election and Fed interest rate decision this week. 

Analysts expect Donald Trump's policies on immigration, tax cuts, and tariffs would put upward pressure on inflation, treasury bond yields, and the USD, while Kamala Harris was seen as the continuity candidate. "It is widely considered that a Trump win will be positive for the USD, though many feel this outcome has been discounted," noted Chris Weston, an analyst at broker Pepperstone. 

On the other hand, the Bank of England (BoE) is likely to cut interest rates on Thursday, despite forecasts that Labour’s budget could lead to higher inflation in the UK the next year. Money markets appeared confident that the BoE would announce the second 25 bps reduction of the year, lowering the policy rate to 4.75%.

• GBP/USD targets 1.3000 as bullish harami pattern signals further gains.
• 100-day SMA at 1.2977 poses significant resistance for bullish momentum.
• Failure to clear resistance may trigger a pullback toward 1.2900, with 200-day SMA at 1.2808 as next support.

The Pound Sterling erased some of its Thursday’s losses against the Greenback and rose 0.56% above its opening price after a dismal US jobs report reassured investors the Federal Reserve would continue to ease policy. At the time of writing, the GBP/USD trades at1.2970

GBP/USD Price Forecast: Technical outlook

The GBP/USD is forming a ‘bullish harami’ candle pattern, which hints the pair could test the previous day's high of 1.2999, opening the door to test the 1.3000 figure. However, strong resistance lies overhead at the 100-day Simple Moving Average (SMA) at 1.2977, which if decisively broken, 1.3000 would be up next.

On further strength, the pair can rise to the current week’s high at 1.3043—the October 30 high—before reaching 1.3100.

If GBP/USD fails to clear the 100-day SMA, a drop toward 1.2900 is on the cards. The next key support is seen at the 200-day SMA at 1.2808.

Oscillators suggests that buyers are gathering momentum, but with the Relative Strength Index (RSI) still far from reaching neutral levels,

GBP/USD Price Chart – Daily

The Pound Sterling (GBP) is trading marginally higher while Gilts remain soft (but off earlier lows) in the wake of Wednesday’s budget, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP steadies after post-budget slide

“Markets continue to think a 25bps reduction in the BoE’s target rate on November 7th is likely but expectations have been pared back to 80% risk of a cut next week.”

“The GBP got roughed up on Thursday but price action suggests the pressure is abating. A solid rally off the intraday low yesterday put in a bug, bullish “hammer” pattern on the intraday chart, delivering some grinding gains for the pound which is keeping the intraday range today well inside yesterday’s—a clear consolidation signal.”

“Major support is developing now around 1.2840. Resistance is 1.2940/45 and (stronger) 1.30.”

The Pound Sterling (GBP) is likely to trade in a range, probably between 1.2860 and 1.2950. In the longer run, GBP must break and remain below 1.2845 before a sustained decline can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Below 1.2845 a sustained decline can be expected

24-HOUR VIEW: “Yesterday, GBP fell by 0.48%, closing at a 2-1/2-month low of 1.2899. The sharp drop appears to be overdone, and GBP is unlikely to weaken much further. Today, GBP is more likely to trade in a range, probably between 1.2860 and 1.2950.”

1-3 WEEKS VIEW: “We indicated on Wednesday (30 Oct, spot at 1.3010) that ‘While GBP is expected to trade in a 1.2950/1.3070 range for now, the slightly firm underlying tone suggests it will likely test the top of the range first.’ GBP subsequently rose to 1.3043, but in a sudden move yesterday, it plunged sharply to a low of 1.2845. While there has been a buildup in momentum, GBP must break and remain below 1.2845 before further sustained decline can be expected. The likelihood of GBP breaking clearly below 1.2845 will remain intact, provided that 1.2985 is not breached. Looking ahead, the next level to watch below 1.2845 is 1.2795.”

• GBP/USD weakens to near 1.2895 in Friday’s early Asian session. 
• The US Nonfarm Payrolls data will take center stage later on Friday. 
• The UK Autumn Forecast Statement weighs on the GBP. 

The GBP/USD pair remains on the defensive around 1.2895, the lowest since August 16 during the early Asian trading hours on Friday. The major pair edges lower after the UK Labour government announced its first Autumn Forecast Statement on Wednesday. 

The US inflation, as measured by the Personal Consumption Expenditure Price Index (PCE), grew at a slightly faster-than-expected pace in September. Data released by the US Bureau of Economic Analysis (BEA) on Thursday showed that the headline PCE rose 2.1% YoY in September, compared to 2.2% in August, in line with the market consensus of 2.1%. 

The core PCE, which excludes volatile food and energy prices, jumped 2.7% in the same period, matching August's rise and above the market estimation of 2.6%. According to the CME FedWatch tool, the financial markets expect the Fed to cut the interest rate by 25 basis points (bps) in both of the policy meetings to be held in the November and December meetings.

Investors will closely monitor the US Nonfarm Payrolls (NFP) data for October on Friday for fresh impetus. The NFP report is expected to show that the US economy added 113K job additions in October, while the Unemployment Rate is expected to remain steady at 4.1%.

On the UK’s front, the UK's new Labour government released its first budget on Wednesday, which includes £40 billion in tax rises to plug a hole in the public finances and allow for investment in public services. 

Additionally, the UK’s Office for Business Responsibility (OCR) upwardly revised inflation forecasts for 2024 to 2.5% from 2.2% estimated earlier in March, a revision that also led traders to expect less interest rate reductions by the Bank of England (BoE). This, in turn, might cap the downside for the Pound Sterling (GBP). 

• GBP/USD breaks below the 100-day SMA at 1.2975, with further downside possible if it closes below the 1.2900 mark.
• Key support lies at 1.2885, with the 200-day SMA at 1.2807 as the next target for sellers.
• Resistance emerges at 1.2950/60, with RSI signaling bearish momentum approaching oversold conditions, potentially capping a rebound.

The Pound Sterling dropped to a new two-month low of 1.2885 against the Greenback during the session, as UK Gilts rose sharply following the budget release. However, the GBP/USD has recovered some ground yet is losing over 0.30% and trades at 1.2918.

GBP/USD Price Forecast: Technical outlook

The GBP/USD has broken below the 100-day Simple Moving Average (SMA) at 1.2975, extending its losses below the ascending channel support trendline, paving the way for further downside.

Although the 1.2900 figure was cleared, Pound sellers must achieve a daily close below it. In that outcome, the GBP/USD's next support would be 1.2885, the day’s low, followed by the 200-day SMA at 1.2807.

Conversely, if buyers keep the GBP/USD afloat above 1.2900, the first resistance would be a previous support trendline at around 1.2950/60 before bulls can test 1.2999.

Oscillators favor further GBP/USD downside, as the Relative Strength Index (RSI) deepened its fall in bearish territory, about to reach oversold conditions.

GBP/USD Price Chart – Daily

The UK budget update largely conformed to expectations. The government will raise taxes and borrowing significantly but will also spend heavily on priority projects, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

GBP is trading firmer

“UK markets largely took the news in their stride. UK Gilts weakened in the budget aftermath but losses reflected the generally weaker tone of fixed income markets (where core European bonds actually performed worse).”

“UK rates markets continue to anticipate a November rate cut from the BoE but, with the budget expected to give the economy a lift relative to its prior state, expectations for a December follow up have been pared back significantly. Rate sentiment continues to weigh on Gilts today but may add to GBP underpinning in the short run at least.”

“Choppy markets yesterday have muddied the near-term outlook for the GBP. While spot is holding within its recent trading range, heavy selling pressure yesterday has left a dent in the intraday and daily charts which may stifle the week-long grind higher in Cable from the low 1.29s. Intraday support does look firm around 1.2935 but a move above 1.3043, yesterday’s high, is needed to give the pound a clearer technical lift now.”

• GBP/USD faces challenges as the US Dollar appreciates amid market caution ahead of the US presidential elections.
• The latest Reuters/Ipsos poll indicates that Harris holds a narrow lead at 46% compared to Trump's 43%.
• UK's budget features £40 billion in tax increases designed to address public finance shortfalls and support funding for public services.

GBP/USD extends its losses for the second successive day, trading around 1.2950 during the Asian session on Thursday. This downside of the pair could be linked to the solid US Dollar (USD) as a market caution persists amid uncertainty surrounding the upcoming US presidential election.

Former President Donald Trump has made gains among Hispanic men as the November 5 US presidential election approaches. Meanwhile, Harris has seen increased support among white women. The race between the two candidates is extremely close, with Harris holding a slight lead of 46% to 43% in the latest poll conducted from October 16 to 21.

Traders are now focusing on upcoming key US data releases including PCE inflation data on Thursday and Nonfarm Payrolls (NFP) on Friday. On Wednesday, the Greenback encountered headwinds as the US Gross Domestic Product (GDP) annualized expanded by 2.8% in Q3, below 3.0% in Q2 and forecasts of 3.0%. However, the ADP Employment Change reported 233,000 newly added workers in October, marking the largest increase since July 2023.

The Pound Sterling (GBP) dipped following the release of the UK's new Labour government's first budget on Wednesday, which includes £40 billion in tax increases aimed at addressing public finance shortfalls and funding public services, according to CNBC. A significant revenue-generating measure in the budget is an increase in National Insurance (NI) contributions, which are taxes on earnings paid by employers.

Traders are also expected to pay close attention to a keynote speech by Bank of England (BoE) Deputy Governor Sarah Breeden at the Hong Kong Monetary Authority and Bank for International Settlements joint conference on the “Opportunities and Challenges of Emerging Technologies in the Financial Ecosystem.”

• GBP/USD softens to near 1.2955 in Thursday’s early Asian session. 
• The UK's Labour government raised taxes by £40 billion in the new budget plan. 
• Flash US GDP expanded at an annualised rate of 2.8% in Q3. 

The GBP/USD pair extends the decline to around 1.2955 during the early Asian session on Thursday. The Pound Sterling (GBP) edges lower after the UK budget announcement. The attention will shift to the US Personal Consumption Expenditures (PCE) - Price Index data later on Thursday.

The UK's new Labour government released its first budget on Wednesday, which includes £40 billion in tax rises to plug a hole in the public finances and allow for investment in public services, per CNBC. One of the measures that is projected to be one of the most revenue-generating for the UK Treasury is a hike in the amount employers pay out in National Insurance (NI), a tax on earnings. 

The US Gross Domestic Product (GDP) for the third quarter fell below expectations. The ADP Employment Change report for October revealed that private companies hired more people than expected. According to the CME FedWatch tool, traders have priced in a nearly 95.2% chance of a 25 bps rate cut by the Fed in the November meeting. 

The release of the US PCE inflation data on Thursday could offer some hints about the size and pace of the US Federal Reserve's (Fed) rate reduction path. The headline PCE is expected to see an increase of 0.2% MoM in September, while the core PCE is estimated to see a rise of 0.3% MoM in the same reported period. The softer-than-expected outcome could trigger the hope of deeper rate cuts and might exert some selling pressure on the USD. 

• GBP/USD bounces off ascending channel support, clears 1.3000, and reaches a high of 1.3039 after the UK’s autumn budget release.
• Buyers must clear October 18 peak at 1.3070 to test 1.3100 and the 50-day SMA at 1.3138.
• Key support lies at the October 29 close of 1.3014 and the 100-day SMA at 1.2974, followed by the October low of 1.2936.

The Pound Sterling erased some of its earlier losses, climbing above its opening price against the US Dollar, after the UK Chancellor Rachel Reeves revealed its autumn budget. The GBP/USD trades above 1.3000, virtually unchanged.

According to the Financial Times, the Autumn budget was well received by the markets. Gilt yields are falling, and Cable aimed higher after the new labor Government announced its first budget in 14 years.

GBP/USD Price Forecast: Technical outlook

The GBP/USD bounced at the bottom of an ascending channel trendline, extending its gains after Chancellor Reeves, ended her speech. Initially, the pair cleared 1.2970, and pushed higher, clearing the 1.3000 figure hitting a high of 1.3039.

From a technical standpoint, the GPB/USD is not out of the woods, as sellers continued to cap the pair’s advance. Buyers must clear October 18 peak at 1.3070, so they could remain hopeful of testing 1.3100. Once those key resistance levels are taken out, the 50-day Simple Moving Average (SMA) would be up next at 1.3138.

Otherwise, if sellers push the exchange rate below the October 29 daily close of 1.3014, it would expose the 1.3000 psychological level as the next support. A breach of the latter will expose the 100-day SMA at 1.2974, before the GBP/USD tumbles towards October 300 low of 1.2936.

GBP/USD Price Chart – Daily

The Pound Sterling (GBP) is trading a little softer ahead of Chancellor Reeves’ first budget (8.30ET) for Labour. The broad outlines of the government’s fiscal plans have been flagged to the media and markets, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

GBP slips ahead of Labour government’s budget

“The anticipated mix of tax hikes and increased borrowing to invest in key policy priorities (health and infrastructure, for example) is getting scored as growth-positive by the Office of Fiscal Responsibility. The mix of growth enhancing fiscal policy plus tighter BoE monetary policy may be GBPsupportive in the medium term—assuming markets find Reeves’ plans credible.”

“GBP’s drop back from the intraday high in the low 1.30s leaves a negative look to the short-term chart via a bearish outside range session on the 6-hour chart. The drop interrupts the grinding improvement in Cable seen since last week’s rebound from the low 1.29 area and risks renewing downside momentum in the pound—if sustained over the session.”

“Support is 1.2940 and 1.2900/10. Resistance is 1.3025.”

Chancellor Reeves said there would be new rules in her budget governing Treasury borrowing, allowing debt levels to increase by up to £50bn over 5 years – to facilitate investment in Britain’s infrastructure. GBP was last seen at 1.30 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

BoE can become a ‘bit more aggressive’

“There were concerns if her plans would be similar to former PM Liz Truss’s infamous mini-budget in 2022 although Reeves was quick to preempt in saying that she would stick firmly to a requirement for day-to-day spending to be matched by tax receipts. Increase in borrowings may keep rates elevated for longer.”

“This suggests that the BoE may not have much room to lower rates, which may run in contrast to Governor Bailey’s recent dovish shift in rhetoric, in which he said that BoE could become a ‘bit more aggressive’ and ‘a bit more activist’ in its approach to cutting rates if the news on inflation continued to be good (Telegraph interview).” “Bearish momentum on daily chart shows signs of fading while RSI shows rose from near oversold conditions. Resistance at 1.3040 (21 DMA), 1.3110 (38.2% fibo retracement from Sep high to Oct low). Support at 1.2975 (100 DMA), 1.2910 (recent low).”

The Pound Sterling (GBP) is facing mild upward pressure; it could edge higher to 1.3035. The major resistance at 1.3070 is not expected to come into view. In the longer run, GBP is expected to trade in a 1.2950/1.3070 range; slightly firm underlying tone suggests it will likely test the top of the range first, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Upward momentum appears to be building

24-HOUR VIEW: “We highlighted yesterday that ‘The price action still appears to be part of a sideways trading phase.’ We expected GBP to ‘trade in a 1.2940/1.2995 range.’ We did not expect GBP to rise to a high of 1.3018. There has been a slight increase in momentum. Today, there is a chance for GBP to edge higher to 1.3030 before levelling off. The major resistance at 1.3070 is unlikely to come into view. Support is at 1.2990; a breach of 1.2970 would indicate that the current mild upward pressure has eased.”

1-3 WEEKS VIEW: “Our latest narrative was from two days ago (28 Oct, spot at 1.2960), wherein ‘downward momentum is slowing, and should GBP break above 1.3000 (‘strong resistance’ level), it would indicate that GBP is not declining further.’ Yesterday, GBP rose and broke above 1.3000, reaching a high of 1.3018. Downward momentum has faded. Upward momentum appears to be building, albeit tentatively. While GBP is expected to trade in a 1.2950/1.3070 range for now, the slightly firm underlying tone suggests it will likely test the top of the range first. At this time, a sustained break above this level appears unlikely.”

• GBP/USD weakens to near 1.3005 in Wednesday’s early European session. 
• The bearish outlook of the pair remains intact below the 100-period EMA. 
• The first downside target to watch is 1.2943; the immediate resistance level emerges at 1.3016. 

The GBP/USD pair trades in negative territory around 1.3005 on Wednesday during the early European trading hours. Investors will closely monitor the UK Autumn Budget 2024. The UK government is set to deliver Labour’s first budget in almost 15 years on Wednesday. Commerzbank analysts said that if the budget combines austerity with the hope of tackling long-term investment, “this should be positive for the pound as it would strengthen the U.K.’s long-term growth potential.”

GBP/USD keeps the bearish vibe on the 4-hour chart as the major pair is below the key 100-period Exponential Moving Average (EMA). Nonetheless, the Relative Strength Index (RSI) stands above the 50-midline near 57.60, indicating that further upside cannot be ruled out in the near term. 

The lower limit of the Bollinger Band at 1.2943 acts as an initial support level for GBP/USD. A breach of this level could expose the 1.2910-1.2900 region, portraying the low of October 24 and the psychological figure. The next contention level to watch is 1.2813, the low of August 14.

On the bright side, the upper boundary of the Bollinger Band at 1.3016 acts as the first upside barrier for the major pair. Extended gains could pave the way to the 100-period EMA at 1.3032. The next hurdle is located at 1.3071, the high of October 18.

GBP/USD 4-hour chart

• GBP/USD edges lower to near 1.3010 in Wednesday’s early Asian session.
• Job openings fell more than expected in September. 
• Traders brace for the UK’s Autumn Budget, advanced US Q3 GDP data, which will be released on Wednesday.

The GBP/USD pair weakens around 1.3010 despite the consolidation of the US Dollar (USD) during the early Asian session on Wednesday. Investors await the release of the UK’s Autumn Budget, the US October ADP Employment Change for October and the advanced US Q3 Gross Domestic Product (GDP), which are due later on Wednesday.

The US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday that Job openings came in at 7.443 million, followed the 7.861 million (revised from 8.04 million) seen in August, and came in below the market expectation of 7.99 million. This report might prompt the Federal Reserve (Fed) dovish bets and weigh the Greenback against the Pound Sterling (GBP). 

The Fed is likely to cut its key interest rate by 25 basis points (bps) on November 7, according to all 111 economists in a Reuters poll, with over a 90% majority expecting another quarter-percentage-point move in the December meeting.

On the UK’s front, the government is set to deliver Labour’s first Budget in almost 15 years on Wednesday. Rachel Reeves, the UK Chancellor of the Exchequer, might be preparing to unveil £40 billion in tax hikes and spending cuts overall. Employer National Insurance contributions, capital gains tax, and inheritance tax allowances are all possible targets.

Commerzbank analysts noted that if the budget combines austerity with hope of tackling long-term investment, “This should be positive for the pound as it would strengthen the U.K.’s long-term growth potential.”