Traders wager £7 billion against the pound as Healey finalises first Budget

Ahead of Chancellor John Healey’s first Budget, hedge funds and foreign-exchange traders have amassed the largest bet against the British pound in nearly a decade, with the Commodity Futures Trading Commission noting roughly £6.6 billion of sell orders - the biggest since 2017. The Conservatives framed the activity as a “complete lack of faith” in Labour’s economic agenda, while the International Monetary Fund rebuked Healey for favouring a windfall tax on banks over welfare cuts.

Banking executives warned that taxing their recent profit surge could push up mortgage and business-loan rates, dampening credit and investment. The pound has been trading in a narrow band around $1.33, but the sustained pressure marks the most prolonged assault since the Brexit vote. Rising government borrowing costs, now at a 28-year high, limit Healey’s fiscal flexibility, and the Bank of England has so far resisted further rate hikes despite inflation pressures from the Iran conflict. Analysts also note the possibility of higher capital-gains taxes on asset sales, which could deepen fiscal challenges.