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3rd Mar 2021. 3.19pm

Regency View:

Market Alert: The Budget 2021

Chancellor Rishi Sunak had an almost impossible tightrope to walk in today’s budget, deliver enough fiscal prudence to keep the government borrow costs low whilst providing enough stimulus to kick-start a battered economy.

Here’s the key take-aways from a financial markets perspective…

Top Five Headlines:

  1. Sunak warns recovery will be slow but upgrades economic forecasts
  2. Public borrowing at war levels as debt to hit 97% of national income
  3. Corporation tax to rise to 25 per cent and personal tax income threshold to be frozen
  4. Furlough scheme extended until end of September, with VAT cut for ‘hardest hit sectors’
  5. Stamp duty holiday and business rates reprieve remain to end of June

Market reaction:


The reaction to the budget on the currency markets has been mildly bullish for sterling.

GBP is the strongest of the major currencies today, and more importantly it’s the strongest major currency year-to-date.

This sterling strength is a headwind for the FTSE’s exporters and is something that the Bank of England may look at addressing.

GBP/USD Daily Candle Chart

GBP/USD Daily Candle Chart


UK housebuilders have cheered today’s budget.

Rishi Sunak unveiled a mortgage guarantee, which he said would help prospective buyers buy their first home with a deposit that amounted to 5 per cent of the property’s value.

The stamp duty holiday that fuelled a breakneck recovery in the housing market is to be extended by three months to the end of June, before tapering over the subsequent three months.

Stock to Watch: Taylor Wimpey (TW.)

Taylor Wimpey has jumped more than 4% on today’s Budget, but the shares have rallied straight into a key resistance zone.

TW. Daily Candle Chart

TW. Daily Candle Chart


Banking stocks have been buoyed by the budget as plans to support the mortgage market and boost economic growth have been broadly positive.

Rishi Sunak also said that the additional bank surcharge of 8% on profits would be reviewed because the increase in the main corporate tax to 25% would make UK taxation of banks “uncompetitive”.

Stock to Watch: Lloyds (LLOY)

Lloyds is the UK’s largest mortgage lender and they have bounced almost 3% today.

The shares have been carving out a series of higher swing lows into key resistance at 40.8p. Should Lloyds muster enough momentum to break resistance, this would open the door for a move towards 47p.

LLOY Daily Candle Chart

LLOY Daily Candle Chart

Retail & Leisure

The hard-hit retail & leisure sector was at the forefront of today’s budget and the market reaction has been positive with retailers like M&S, pub owners like JD Wetherspoons and hotel chains like Whitbread all rallying.

The furlough scheme was extended until end of September, along with VAT cut for the sector and the business rate reprieve extended until June.

Stock to Watch: Whitbread (WTB)

Premier Inn owner Whitbread have rallied with gusto today – bouncing from the broken resistance level at £34.

WTB Daily Candle Chart

WTB Daily Candle Chart


The UK’s infrastructure bank will have an initial capitalisation of £12bn and be located in Leeds, chancellor Rishi Sunak said.

The bank will support projects that go towards meeting the government’s target of net zero carbon emissions by 2050.

Stock to Watch: CRH (CRH)

Today’s announcement regarding infrastructure has been priced in for some time, hence the Budget reaction across the infrastructure sector has been mild.

Cement produce CRH has exposure to UK, EU and US covid stimulus packages. The shares have rallied with the broader market during the last three sessions. However, we expect the February swing highs at 3,321p to provide short-term resistance.

CRH Daily Candle Chart

CRH Daily Candle Chart


This research is prepared for general information only and should not be construed as any form of investment advice.