Hopes of delivering pre-election tax cuts are likely to be met by funding constraints, even though we estimate the headroom has increased from £13bn to £18bn thanks to slightly lower market rates compared to November’s Autumn Statement. 

UK media have reported Hunt is probably scaling back the size of the tax relief package and that support measures will also be smaller than in November.

A moderately-sized tax relief package (i.e., one that does not trigger gilts turmoil) can probably give some support to GBP this week, but the spectrum of possibilities is admittedly quite wide.