巴黎银行-欧洲-宏观策略-英国预算预览：基调乐观，但挑战依然存在-20181025-8页_902kb

UK Budget Preview Summary

Core Content

The UK Autumn Budget, expected on 29 October 2018, is anticipated to have an upbeat tone due to improved public finances. The Chancellor is likely to present better-than-expected borrowing figures, with borrowing down by 35% compared to the previous year. This improvement is attributed to stronger tax receipts and slower growth in government spending. If this trend continues, the Chancellor may have the flexibility to ease austerity measures without increasing borrowing or taxes in the short term.

Key Messages

• Upbeat Tone Expected: The Chancellor will have the opportunity to present improved public finance figures, which could allow for a more optimistic fiscal outlook.
• Austerity Not Over: Despite the improved finances, the Chancellor is unlikely to end austerity soon due to ongoing fiscal targets and potential economic uncertainties.
• Brexit Impact Uncertain: Brexit remains a significant uncertainty, and the OBR is unlikely to revise its assumptions or forecasts significantly until more concrete details are available.
• Fiscal Targets: The Chancellor aims to reduce the cyclically-adjusted public-sector net borrowing to below 2% of GDP by 2020-21 and return the public finances to balance as early as possible in the next parliament.

Market View

• Borrowing Reduction: The public sector net borrowing is expected to fall by around £5bn in FY2018/19, leading to a net financing requirement of approximately £101bn.
• Gilt Funding: The reduction in borrowing will likely be implemented through the gilt programme, with the removal of 1 long and 1 linker auction and a reduction in unallocated issuance by £1.4bn.
• Remit Split Forecast: The anticipated remit split for the gilt programme is: shorts 25.8%, mediums 21.4%, longs 29.1%, linkers 21.5%, and unallocated 2.2%.
• RPI Consultation Risk: There is an outside risk of a consultation on RPI-linked bonds, which could negatively impact the inflation market if RPI is replaced by CPI or CPIH.
• Market Impact: The market impact of the Budget is expected to be limited due to ongoing Brexit uncertainty and potential political distractions.

Fiscal Outlook

• Improved Public Finances: The public finances have improved faster than expected, with borrowing potentially falling by £13bn in 2018/19.
• Deficit Forecast: The overall deficit is expected to be around £25bn or slightly above 1% of GDP, with cyclically-adjusted borrowing at 1.2% of GDP.
• Fiscal Buffer: This improvement provides the Chancellor with a buffer of over 1% of GDP against the 2% target, offering some flexibility in fiscal policy.
• Policy Flexibility: The Chancellor may use this buffer to ease austerity, such as increasing NHS spending, freezing fuel duty, or softening the rollout of universal credit.
• Conditional Austerity End: The Chancellor may condition the end of austerity on better-than-expected growth, rather than making a detailed policy pledge.

Political Considerations

• Brexit and Political Challenges: The Budget could be overshadowed by political developments, particularly around Brexit and the government's plans to secure a withdrawal agreement with the EU.
• DUP Vote Risk: There is speculation that the DUP may vote against the Budget in protest over Brexit plans, which could trigger a confidence motion and potentially lead to an early general election.
• Fixed Term Parliament Act: A rejection of the Budget could not be used as a confidence vote, but could lead to political instability.

Economic Projections

• Growth Outlook: The OBR is unlikely to revise its growth projections significantly, as recent productivity gains have not been enough to justify major changes.
• Consumer Spending: There is potential for faster-than-expected growth in consumer spending, but the Chancellor must balance this with fiscal constraints.
• Brexit Uncertainty: The lack of concrete details on the Brexit deal will continue to cloud the economic outlook, making it difficult to forecast a "Brexit growth dividend."

Long-Term Considerations

• RPI Replacement: As DB schemes run off, there is a growing preference for CPI/CPIH-linked bonds, which could influence future market trends.
• CPIH Growth: The CPIH-linked market is already expanding, and this trend is expected to continue as OFWAT moves to use CPIH in its price controls from 2020.

Conclusion

The Autumn Budget is expected to highlight improved public finances and offer some fiscal flexibility, but the Chancellor will still face significant challenges in meeting long-term fiscal targets. The political environment, particularly around Brexit, is likely to overshadow the Budget's economic message, and the market impact may be limited. The potential for RPI-linked bond reforms and the long-term shift towards CPI/CPIH-linked instruments will also be important factors to watch.