Aftermath of UK autumn budget: where to next for stocks, yields and sterling?​

​​​UK budget aftermath – where to next?

​What immediate impact has Chancellor Rachel Reeves’ significant UK budget featuring a £40bn tax increase and £28bn annual borrowing, alongside a £70bn spending boost for 2026-27 had on the British pound sterling, UK Gilt yields, sectors and stocks?

​US Gilt yields surge to one-year highs

​The autumn budget has triggered a rise in government borrowing costs, with 10-year and 30-year Gilt yields reaching respective one-year highs at 4.44% and 4.68%.

​10-year Gilt daily candlestick yield chart

​It has to be said the UK 10-year yield had already been rising from its 3.73% mid-September low to around 4.25% ahead of the autumn budget but since yesterday rallied to levels last seen at the beginning of November 2023.

​10-year Gilt weekly candlestick yield chart

​The next medium-term technical upside target, if a weekly chart close above the 4.42% May peak were to be made, would be the September 2022-to-October 2023 peaks at 4.58%-to-4.75%.

​The 30-year Gilt yield is in a similar technical situation whereby a weekly chart close above the 4.88% May high would open the way for the psychological 5% mark and perhaps also the October 2023 peak at 5.20% to be hit.

​British pound sterling little changed

​The pound sterling saw some intraday volatility around the autumn budget but remained within a near 100 pip range versus the US dollar whilst being capped by a key technical resistance zone close to the $1.3000 mark.

​GBP/USD daily candlestick yield chart

​While GBP/USD remains below the $1.3000-to-$1.3045 resistance area, the October downtrend remains intact with the April-to-October uptrend line at $1.2935 representing the first downside target. A fall through it would put the October low at $1.2908 on the cards. Below it lies the June high at $1.2861.

​Only a rise an daily chart close above the 15 October high at $1.3103 could help the bulls to take over the reins.

​Versus the euro, the pound sterling depreciated more significantly post-budget, though, with the EUR/GBP pair bouncing from its key technical £0.8318-to-£0.8296 support area towards the 55-day simple moving average (SMA) at £0.8393. If bettered, the early October high at £0.8434 would be next in line, followed by the September peak at £0.8463.

​Potential slips may encounter minor support around the 24 October high at £0.8352 with the major £0.8318-to-£0.8296 support zone expected to underpin into year-end.

​EUR/GBP daily candlestick yield chart

​UK autumn budget impact on FTSE 100, FTSE 250 and FTSE AIM All Shares

​Despite initial market concerns, the FTSE 250 showed some positive response and closed around half a percent higher on Wednesday but the real winner was the FTSE AIM All Share Index which rallied by 4% as changes to inheritance tax proved no worse than feared.

​Even though the Budget provided some certainty for smaller companies and UK investors, the FTSE 100 didn’t take well to the budget and has declined by nearly 2.5% over the past three days.

​FTSE 100 daily candlestick chart

​The FTSE 100 may find short-term support along the 200-day SMA at 8,082 but failing that, might slip to the late July low 8,056 and perhaps revisit the psychological 8,000 mark.

​Any short-term recover is likely to encounter resistance between the September-to-early October lows at 8,169-to-8,185.

​The technical picture could potentially be more positive for the FTSE AIM All Share index if an extension of Wednesday’s 4% rally to above a key technical resistance area were to ensue. It consists of the late September-to-mid-October highs at 3,625-to-3,635 and would need to be exceeded for a medium-term technical bullish reversal to unfold.

​FTSE AIM All Share index candlestick chart

​While the September-to-mid-October highs at 3,625-to-3,635 cap on a weekly chart closing basis, the May-to-October downtrend will be deemed to remain intact.

​Betting, housebuilders and pub chains share price reaction

​Shares in betting firms saw a relief rally after Wednesday's autumn budget contained no rumoured tax changes, while a cut in beer duty provided cheer to pub operators and the government’s infrastructure investment plans provoked an initial rally in the UK housebuilder sector.

​Except for the gambling companies, which maintained most of their gains during Thursday’s continued sell-off in UK shares amid higher Gilt yields, the pub and housebuilder shares mainly resumed their pre-budget downward paths, and this despite Wednesday’s sharp intraday moves higher.

​Betting, housebuilders and pub chains 5-day share price comparison