UK's Sunak to announce a hike in property tax threshold, cut VAT on Wednesday – The Times

Citing the UK government sources, the UK Times reported on Sunday, the country’s Finance Minister Rishi Sunak is considering plans to raise the property tax threshold to as high as GBP500K ($623,700) while temporarily slashing the value-added tax (VAT) in the hospitality sector, in an effort to boost the economy.

Key takeaways

“Sunak’s plans will also include a temporary VAT cut for pubs, restaurants and cafés to help to protect 2.4 million jobs in the hospitality sector.”

“Exemption in the stamp duty payment for the planned threshold is for a temporary period and could go up to a year.”

“Sunak is set to make an announcement on Wednesday on the government’s job support schemes and its plans to kickstart the economy.”

FX Implications

These above measures could likely benefit the pound and accelerate the upside in the GBP/USD pair.

The cable was last trading at 1.2480, modestly flat on the day. The spot recovered from daily lows of 1.2459, reached after markets reacted to the weekend comments from the BOE Governor Andrew Bailey on the negative interest rates.