GBP flows: GBP little changed after as expected budget

GBP is unmoved by an essentially as expected Budget. The 2ppt cut in national insurance contributions was expected, but has effectively been funded by other tax increases, so there isn’t a significant cut in tax paid by workers. However, front end UK yields are a little higher, suggesting there could be some positive GBP impact. EUR/GBP is little changed, still hovering around 0.8550, and is starting from a place that looks a little low relative to current yield spreads, so we wouldn’t expect a significant positive GBP reaction.