The pound plummeted to a nearly seven month low and £22billion has been wiped out from the Ftse’s market cap in response to Chancellor Rachel Reeves’s pre-Budget address on the state of the UK economy.
Earlier this morning, the Chancellor sidestepped questions over whether tax rises will be included in this year’s Autumn Budgetear’s Autumn Budget in a major speech earlier this morning.
In response, sterling slipped by as much as 0.4 per cent against the dollar $1.3086, which is the lowest the currency has reached since April 2025.
Notably, the Ftse 100 dropped one per cent while the domestically focused Ftse 250 fell 0.9 per cent with the Chancellor asserting Britons “will all have to contribute” to reducing the debt burden and bolstering the economy.
The pound has plummeted amid growing anxiety over the Chancellor’s tax decisions
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Furthermore, the 10-year gilt yield fell six basis points to 4.38 per cent, while the 30-year yield hit its lowest level since April before returning to earlier levels as investors reacted to a lack of specific policy detail in the Chancellor’s address.
Ahead of her November 26 fiscal statement, the Chancellor gave an “ironclad” commitment to her strict fiscal rules but said today’s speech was not about confirming “individual choices” related to tax and spending.
Defending her decision-making, the Chancellor said: “If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future.”
When asked by journalists about Labour’s previous promise to not hike income tax, National Insurance or VAT, Ms Reeves added; “As Chancellor, I have to face the world as it is not the world that I want it to be.
“And when challenges come our way, the only question is how to respond to them, not whether to respond or not. And as I respond at the Budget on the November 26, my focus will be on getting NHS waiting lists down, getting the cost of living down, and also getting the national debt down.”
Before taking questions from the press, the Chancellor characterised her upcoming fiscal statement as being “led by this Government style of fairness and opportunity and focused entirely on the priorities of the British people”.
She added: “Protecting our NHS, reducing our national debt, and improving the cost of living. There has been a lot speculation about the choices that I will make, I understand that.
“These are important choices that will shape the future of our country for years to come. I want people to understand the circumstances we are facing, the principles guiding my choices, and why I believe they will be the right choices.”
Over the last week, the pound has fallen against the dollar amid growing anxiety over the Chancellor’s Budget
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Despite today’s intervention, analysts have accused the Chancellor of “learning nothing” from last year’s Budget, which came under fire over Ms Reeves’s decision to raise National Insurance contributions on employers.
Samuel Fuller, the director at Financial Markets Online, shared: “Rachel Reeves clearly likes to prepare people for bad news.
“And while there was precious little new in what she said this morning, there were heavy hints that the news is about to get bad.
“Her ‘ironclad’ commitment to the fiscal rules in the face of Britain’s soaring welfare bill was supposed to demonstrate her resolve and instill confidence, but it’s what she didn’t say – about tax rises – that has got markets spooked.
“UK stock markets wilted, and the Pound extended its slide against both the Euro and the Dollar, in response to a speech that was long on bad vibes and short on detail.
“In the run up to last year’s Budget, the Chancellor spent weeks dropping hints that it would hurt.
“If her plan was to get the bad news out early and then surprise the country into a ‘well that wasn’t so bad’ relief rally, it failed.
“Now she is hinting darkly again while the Government tries to find a form of words that will allow it to claim that an increase in personal taxes isn’t, in fact, a breach of its manifesto pledge to not increase personal taxes.”