UK's Reeves: Will increase tax rates on savings, dividend and property income by 2%

Eren Sengezer FXStreet

While presenting the Autumn Budget on Wednesday, UK Finance Minister Rachel Reeves said that there will be no return to austerity and added that they will maintain investment in the economy and health services, per Reuters.

Key takeaways

"Today I am asking everyone to make a tax contribution."

"People only in receipt of basic or new state pension will not have to pay small amounts of income tax."

"Will increase tax rates on savings, dividend and property income by 2 percentage points."

"Will extend freeze on income tax thresholds by a further 3 years from 2028."

"Will raise alcohol duties in line with inflation."

"Capital gains tax relief for sale of businesses to employee ownership trusts will fall to 50% from 100%."

"Capital gains tax receipts are forecast to rise to 30 billion Sterling in 2030 from 14 billion Sterling now."

"Borrowing will fall as a share of GDP in every forecast year."

"OBR has cut forecasts for productivity by 0.3 percentage points to 1% by end of forecast."

"Will introduce three-year stamp duty relief on new IPOs in Britain."

"From April 2027, will require 8,000 Pounds of 20,000 pound ISA limit for under-65s to not be invested in cash."

"OBR forecasts net cash requirement to increase by 4.2 billion Sterling next year to 133.3 billion Sterling."

Market reaction

GBP/USD gains traction after dipping below 1.3150 with the initial reaction to the Office for Budget Responsibility's (OBR) projections, and was last seen trading modestly higher on the day at 1.3180.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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