‘Vote of no-confidence’ as traders place £7bn bet against the pound ahead of John Healey’s first Budget

Traders have built up £6.6 billion in outstanding orders to sell sterling, the largest such position since March 2017, as Chancellor John Healey prepares his first Budget. The figures have prompted Conservative criticism of Labour’s economic policies, while investors weigh the Government’s plans against high borrowing costs and its commitment to fund day-to-day spending through taxes.

The pound has recently traded around $1.33, but market sentiment towards it is more negative than after the 2022 mini-Budget, according to the article. Sterling weakness can make exports cheaper while raising the cost of overseas holidays and imports, potentially adding to inflation. Possible Budget measures include a windfall tax on banks and higher capital gains tax; industry figures warn these could affect lending, investment and growth.