Possible scenario
Mixed Consolidation
30% Chance
The government chooses a compromise: meaningful tax rises, slower departmental spending growth and some accounting changes to preserve fiscal headroom. This outcome is plausible because it reduces the political damage of explicit tax hikes while giving the Office for Budget Responsibility enough tightening to validate the fiscal rules.
Initial impacts
- Market volatility Down
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Down
- US dollar Down
Secondary impacts
- Finance +0.2%
- Business Services -0.2%
Portfolio impact
S&P 500+0.1%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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