Light Pressure As Sunak Flags Tax Cuts, But Seemingly Remains Focused On Supply Side

Gilts come under light pressure as PM Sunak opens the door for sustainable and targeted tax cuts. Still, note that most of his subsequent comments focused on business investment and funding for the education of teachers and the like, as opposed to anything centred on potential tax cuts for households/individuals. This will have limited the impact on gilts.

• Sunak was subsequently questioned on the prospect for tax cuts for households but passed on the opportunity to comment given the proximity to Wednesday’s Autumn Statement.
• He also took the chance to reference a focus on the supply side of the economy.
• Gilt futures stick comfortably within the pre-Sunak range, last showing -15 or so at 97.05.
• Cash gilts yields are 1-2bp higher on the day across the curve.