The UK’s autumn budget has avoided major fiscal changes that could unsettle debt markets, but leaves highly leveraged businesses facing continued pressure from inflation, elevated energy costs, and weakening consumer demand. Chancellor John Healey’s cautious approach is unlikely to alter refinancing conditions in the coming quarters, with the clearest market reactions seen in the banking and gambling sectors.
Healey prioritised fiscal discipline and targeted support for households and businesses in his first budget today (28 October), while the Office for Budget Responsibility (OBR) has forecast slower growth and subdued investment in 2027.
“This was very much a steady-as-she-goes budget,” Mike Bell, head of market strategy at RBC BlueBay Asset Management, told 9fin. “The government has chosen to maintain its current course, avoiding major reforms or unnecessary risks that could unsettle the gilt market. It’s not particularly ambitious, but that’s precisely the point: they don’t want to rock the boat ahead of an election.”
For corporate borrowers however, the immediate implications for refinancing conditions appear limited, although the outlook remains challenging for companies already grappling with higher borrowing costs and pressured earnings.
“Avoiding a bond market wobble is only half the job,” said Andrew Chorlton, chief investment officer for fixed...
