UK: Reeves-Won't Need A Repeat Of Tax-Raising Budget 'On Scale Of Oct 2024'
Chancellor of the Exchequer Rachel Reeves speaking in a House of Commons select committee hearing regarding last week's Spring Statement. Livestream here. Asked by opposition Conservative MP John Glen whether she can rule out raising taxes in the October Budget, Reeves says that she will 'not need to repeat' the scale of tax rises that was seen in the 2024 budget.
- Regarding the upcoming imposition of US 'reciprocal tariffs', Reeves says "I do believe in free trade" and claims "the UK does have balanced trade with the US." Says "We do not want to see trade barriers go up but fall...not just with the US...but the EU, India and other countries..."
- Asked whether the UK will impose retaliatory tariffs, says "Let's first see how other countries respond...Big UK exporters don't want gov't to rush into a response." Regarding the UK's stance on US tariffs, which has been seen as less combative than the EU, says "We do not want to do anything that will undermine an economic agreement with the US...We are not going to rush into action to get a quick headline."
- Reeves: "Specific tariffs on the UK are less relevant than the global demand picture...Even if [a deal] with the US is possible, it does not mean we are out of the woods."
- Says she understands the US' position with regard to its trade balance, but that the UK is not the root cause of this.
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CANADA DATA: Tariff Fears Hit Manufacturing Confidence and Boost Input Costs
The S&P Global Canada manufacturing PMI slid from 51.6 in Jan to 47.8 in February, its lowest since July in clear signs of tariff disruption. Highlights from the press release (in full here):
- “Canada’s manufacturing economy suffered a notable deterioration in performance during February. Output and new orders both declined, largely due to considerable market uncertainty related to tariff concerns.”
- “Job losses were also recorded, whilst confidence in the outlook turned pessimistic for only the second time in the survey history.”
- “Amid some reports of vendor price uplifts in response to anticipated tariffs, input cost inflation rose to its highest level since April 2023.”
- Output price inflation kept to a similar pace however: "Output charges were increased in response, with inflation remaining solid and little changed since January."
DUTCH AUCTION PREVIEW: DDA Prelim initial spread guidance at Bund + 25 to 28bp
DSTA has released its preliminary initial spread guidance for its tomorrow's DDA at to +25.0 to +28.0bps vs the 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
- On offer tomorrow will be E4.0-6.0bln of the new 10-year 2.50% Jul-35 DSL (ISIN: NL0015002F72)
- Books will open tomorrow at 9:00GMT / 10:00CET
EQUITIES: US Cash opening calls
SPX: 5,981.0 (+0.4%); DJIA: 43,956 (+0.3%/+115pts); NDX: 21,039.2 (+0.7%).
