UK: Expected cuts to personal and business taxes should be positive for Sterling – ING

EUR/GBP rebounded modestly on Wednesday after the UK’s Autumn Statement. Economists at ING analyze Sterling’s outlook.

There was some “buy the rumour, sell the fact” effect

Chancellor Jeremy Hunt announced some widely expected cuts to personal and business taxes. The implications for Sterling should – in general – be positive as the tax cuts suggest a better growth outlook and potentially stickier inflation. 

However, it felt like the move in GBP already happened into the announcement, and there was some ‘buy the rumour, sell the fact’ effect causing a softening of the Sterling momentum.