Budget briefing: the key questions answered by Heather Stewart and Pippa Crerar

AI desk brief

The budget was presented as a steady, low-key fiscal easing that reassured markets, with the OBR saying the government still meets its first fiscal rule with £15bn of headroom, though higher borrowing costs have already added £14bn in interest expense. Investors took the announcement calmly, but the bigger market issue is the inflationary hit from higher energy prices: the OBR now sees UK inflation at 3.5% next year versus 2% previously, and the Bank of England could respond with rate hikes as soon as next week.

For metals, the excerpt is more mixed than outright risk-on or risk-off: the Middle East-driven energy shock and firmer inflation backdrop are supportive for bullion, but the prospect of higher UK rates and tighter financial conditions is a near-term headwind. The main forecast risk remains further escalation in the Middle East and its spillover into energy, inflation and interest-rate expectations.