The run-up to the autumn budget 2025 was a messy melee of leaks, kite-flying and speculation, topped off by the comedic accidental publication of its entire contents by the OBR moments before Chancellor Rachel Reeves got to her feet. All the signs pointed to a tax and wealth grab – and Reeves did not disappoint.
Pre-budget volatility
Sterling had slipped to its lowest level since April with investors being cautious over potential tax rises amid the leaks and speculation, which also caused 10-year gilts to spike as investors sold off UK debt. The FTSE 250 dropped with losses running into the tens of billions, again mostly due to the uncertainty surrounding many of the rumoured policies coming out of No.11.
Post-budget reaction
Fear of the unknown drives sentiment when it comes to financial outcomes, which is why there is usually more market volatility before major fiscal announcements. Once the facts are known, decision-making and planning become clearer (albeit maybe not easier) with the advent of certainty.
Going into the announcement today, the pound spiked before immediately dipping after the OBR leak. Within the time Reeves delivered her Budget speech, it had recovered and gone beyond its earlier level, with £1 worth US $1.3196 at the time of writing, mainly due to news of increased “fiscal headroom” (increase in taxes) – from the previous £9.9 billion to £22 billion by the financial year 2029-2030.
Precious metal markets
Precious metals ran up a few percentage points preceding the Budget speech, gold and silver having made huge gains in 2025 both to the tune of around 50%. Today’s announcement had zero discernible impact on the metals market.
In general terms, inflationary pressure, which cannot be avoided, will generally force the dollar/pound value of monitory metals up, so in my view this trend is likely to continue.
Crypto
The crypto market has a life of its own and isn’t overly influenced by changes to UK fiscal policy. Today’s announcement saw no major spikes or dips in Bitcoin (other than that which has already occurred in recent days) or in general.
All eyes are on the US as it moves closer to codifying regulation driving this market. The UK has by and large already outlined its regulation plans in the Crypto Asset and Reporting Framework (CARF), due to come into force 01/01/20206.
In summary: no major dramas
There have been no major corrections of any note. Gilts lowering makes it easier for the government to kick the can down the road, stabilising the UK economy in the short term.
Ultimately, the test will be in the mid to long term and very much dependent on the government’s ability to stick to the plan and maintain fiscal discipline.
NOTE: This is the view of this columnist and should not under any circumstances be taken as independent investment advice.
