British economic output expanded slightly in August before Healey's inaugural Budget

If Healey's Budget credibly addresses growth constraints through targeted investment or productivity measures while maintaining fiscal discipline, gilt yields could stabilize and sterling might find support as markets price in a coherent medium-term growth narrative.

A Budget that neither meaningfully stimulates growth nor tightens fiscal policy substantially would likely leave gilt yields and sterling trading within recent ranges, with market focus drifting to external factors like Fed policy and eurozone dynamics.

Should the Budget signal higher-than-expected tax rises or spending cuts in response to weak growth, or conversely trigger concerns about fiscal sustainability through large borrowing, gilt yields would plausibly rise and sterling could face downward pressure as investors reassess UK growth and debt dynamics.