Business · Markets · 3 hrs ago
Traders place £6.6bn bet against the pound ahead of Healey's first Budget
Traders have placed £6.6bn in orders to sell the pound, the highest level since March 2017, according to US regulator figures.
The bets come as Chancellor John Healey prepares his first Budget in the UK.
Investors are watching whether he can address the government’s finances while keeping to a rule that day-to-day spending should be paid for by taxes, not more borrowing.
Government borrowing costs are at a 28-year high, leaving the Chancellor less room to manoeuvre.
Healey is considering a tax on banks’ profits and may also raise capital gains tax, while the International Monetary Fund has criticised the proposed bank tax.
A weaker pound can make imports and overseas holidays more expensive, and may add to inflation.
The Budget will show which tax and spending choices Healey makes, but the sources do not say what he will announce.
US regulator figures showed £6.6 billion in outstanding orders to sell sterling last week, the highest level since March 2017.
The Daily Mail described the bets as a major show of concern about the pound ahead of Chancellor John Healey’s first Budget.
The article said hedge funds and foreign exchange traders had increased bets that sterling would fall against the US dollar and other currencies.
Conservative shadow chancellor Andrew Griffith called the figures a “concerning vote of no-confidence” in Labour’s economic policies.
The article also reported warnings that a proposed windfall tax on banks could raise borrowing costs and reduce lending and investment.
- Who
- Hedge funds and foreign exchange traders placed orders to sell sterling. The article also quotes Conservative shadow chancellor Andrew Griffith.
- What
- Outstanding orders to sell sterling totalled £6.6 billion, the highest figure since March 2017.
- When
- The orders were outstanding last week, ahead of Healey’s first Budget.
- Where
- Not stated
- Why
- Traders were betting that sterling would fall. The article also described concerns about Labour’s economic policies and the proposed bank windfall tax.
This story does not have two clearly opposing sides.
Commodity Futures Trading Commission figures showed £6.6 billion in outstanding orders to sell sterling.
Traders increased bets that sterling would fall as Healey prepared his first Budget.
- Outstanding sell orders
- £6.6 billion
- Previous peak comparison
- Highest level since March 2017
- Budget
- John Healey’s first
- Currency
- Pound sterling
- Potential bank tax
- Windfall tax on banks’ profits
What people are saying
There may be ten days to the Budget but it seems some investors have made up their minds and are voting with their wallets.
It shows a complete lack of faith in Labour’s economic policies.
A budget that leans heavily on capital gains tax would deepen the fiscal quagmire and growth risks, while heavy borrowing could raise debt servicing costs further and drag the pound lower.