4th November 2025
Hi Simon,
If you’re reporting on the sharp fall in the Pound and UK stock markets in response to Rachel Reeves’ speech in Downing Street, the following analysis may be useful.
Best wishes,
Jack
Samuel Fuller, Director at Financial Markets Online, commented:
“Either the Chancellor is a genius in reverse psychology or she learnt nothing from the beating she took before and after last year’s Budget.
“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 pre-emptive poo-pooing of the Office for Budget Responsibility’s forecasts, due out at the end of the month, suggests they’re unlikely to be glowing.
“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.
“Downing Street policy wonks like to talk about ‘getting ahead of the news cycle’. The Chancellor has tried to get the negativity out of the way before the Budget, but her pre-emptive approach may simply have extended the run of bad news and deepened the uncertainty.”