20181029-法国巴黎银行-UK_BUDGET__A_PRE-ELECTION_BUDGET__6页_867kb

报告摘要

UK Budget Summary: A Pre-Election Budget?

Core Content

The UK Autumn Budget 2018, delivered by Chancellor Philip Hammond, was characterized as a pre-election budget rather than a pre-Brexit one, with a focus on fiscal stimulus and supporting growth. The main goal of the budget was to shore up political support for both the Conservative Party and the broader government, especially in the context of upcoming elections and the ongoing Brexit process.

Key Messages

Fiscal Policy Shift: The Chancellor used a growth windfall to reduce austerity and loosen fiscal constraints, with minimal tax increases.
Optimism on Brexit Deal: There was optimism that a Brexit deal would bring a "deal dividend" for growth in the next fiscal year, but the OBR warned that the Withdrawal Agreement lacks sufficient detail to significantly alter its Brexit assumptions.
NHS and Tech Tax: Increased spending on the NHS and a digital sales tax on tech giants were announced, aimed at attracting Labour voters.
Personal Allowance Increase: The Personal Allowance was raised to £12,500 and the Higher Rate Threshold to £50,000, one year earlier than planned, to also support Conservative voters.
GDP and Unemployment Revisions: The OBR revised real GDP growth upward for 2019 and 2020, and lowered unemployment estimates, providing a more favorable backdrop for fiscal stimulus.
Discretionary Fiscal Stimulus: The budget is estimated to deliver a discretionary fiscal stimulus of 0.3% of GDP for 2019-20, with the possibility of more if a Brexit deal is secured.

Market Implications

Gross Financing Needs: The UK DMO estimates a GBP36.7bn reduction in gross financing needs over the next five years, with the largest impact in FY 2018-19.
Gilt Sales Reduction: The DMO reduced gilt sales by GBP8.5bn, through lower auction sizes, reduced unallocated portion, and smaller IL gilt syndication.
Net Financing Needs: Net financing needs have fallen by GBP12.5bn for FY 2018-19, due to increased NS&I (National Savings & Investments) uptake.
Gilt Curve Impact: The reduction in financing needs is expected to support gilt prices and flatten the yield curve, especially if the inflation report becomes more hawkish in November.
Gilt Fly Strategy: The report favours a bearish gilt fly strategy (selling the 10-year gilt versus the wings), which could benefit from a potential sell-off.

Concerns and Skepticism

Brexit Dividend Uncertainty: The OBR has already stated that the Withdrawal Agreement lacks enough detail to alter its Brexit assumptions, making a "deal dividend" for 2019 unlikely.
Fiscal Objective at Risk: While the Chancellor is expected to meet his fiscal mandate, it is unclear whether he will achieve the objective of balancing public finances in the next parliament. This may require tax increases or scraping the objective, with the latter being more likely.
MPC Outlook: The Bank of England’s Monetary Policy Committee (MPC) may adopt a more hawkish stance in response to the budget, potentially leading to two interest rate hikes in 2019, more than what the market currently expects.

Legal and Compliance Notes

Non-Independent Research: This document is non-independent research and may be subject to conflicts of interest due to its interaction with sales and trading activities.
Marketing Communication: It is classified as a marketing communication under MiFID II and is not intended as investment research.
Disclaimer: BNPP does not offer investment, financial, legal, or tax advice, and the information is not guaranteed for accuracy or completeness.
Confidentiality: The document is provided confidentially and should not be copied, reproduced, or distributed without prior written consent.
Jurisdictional Restrictions: The document may not be eligible for sale in all jurisdictions or to certain investors. It is intended for Relevant Persons as defined by regulatory frameworks in the UK, US, France, Germany, Ireland, Italy, Netherlands, Portugal, and Spain.

Conclusion

The UK Autumn Budget 2018 is seen as a political move aimed at supporting growth and securing electoral support, rather than a purely economic exercise. While it includes fiscal stimulus, the fiscal objective of balancing public finances remains uncertain. The market impact is expected to be positive for gilts, with flattening yield curve and potential interest rate hikes in the near term. However, the report cautions against overreacting to short-term policy shifts and emphasizes the need for independent evaluation of the information provided.