Budget: Can Reeves Satisfy Gilt Market and Labour Party?

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00:00Chancellor Rachel Reeves is set to unveil her much-anticipated budget later today.

00:04Let's go to Bloomberg's Lizzie Burden at Westminster for a preview. Lizzie.

00:10Well, I know we've had months of speculation, weeks of leaks.

00:14Finally, we're here and the Chancellor is caught between the bond vigilantes on the one hand

00:19and the left wing of the Labour Party on the other.

00:22At first, she seemed to be laying the pitch for breaking Labour's manifesto, a rise in income tax.

00:28And then there was this policy U-turn, and we've had officials preparing us for a smorgasbord of tax rises.

00:35So it's on the front page of the UK newspapers this morning.

00:39She's bracing for a tax-heavy budget.

00:41It looks like she's going to take aim at workers, savers and pensioners.

00:46One of the biggest measures expected to be a stealth tax rise, freezing personal tax thresholds.

00:52But the big question here is, how much headroom does she leave against her fiscal rules?

00:5715 billion pounds is the expected figure.

01:00The market would like more, but already that is going to be politically painful.

01:04Never before has Labour polled worse than this at this point.

01:08But really, the arbiter of the success will, of course, be the markets.

01:13And we might not see the full market reaction until well after Reeves sits down.

01:17That's what history has shown us.

01:19Of course, the spectra of LizTrust looms over Rachel Reeves, but we're also watching the currency markets.

01:26You've seen a huge amount of volatility in the pound-euro trade.

01:29You've seen traders piling into bets that you'll have lower pound against the dollar as a result of this budget.

01:36If Reeves can dance on this pinhead, balance the books and pull this off,

01:41actually, you might see a bit of a relief rally for Stirling.