Introduction
With the UK Autumn Statement set for 26 November 2025, finance leaders across import/export businesses are preparing for policy shifts that could affect currency markets, cost structures, and the broader trading environment. While the precise contents of the Statement are still unknown, historical patterns and government briefings offer important clues.
In this article, we highlight what’s expected from the Autumn Statement, why it matters for GBP volatility, and how UK businesses can proactively manage currency risk through hedging strategies like forwards, market orders and natural hedging.
GBP Volatility Around Budget Events
Currency markets tend to respond swiftly to major fiscal events. In the run-up to previous Autumn Statements and Budgets, the pound (GBP) has often moved sharply depending on investor expectations around debt, spending, and growth.
For example, during Chancellor Rachel Reeves’ 4 November 2025 pre-Statement remarks, GBP weakened modestly amid hints of “difficult choices” ahead — signalling potential tax adjustments or public sector savings. In past cycles, credible fiscal tightening has calmed gilt markets but weighed on GBP in the short term, while surprise spending pledges or uncertain fiscal plans have triggered volatility.
What to watch for on 26 November:
- Debt targets and tax changes: Hawkish plans may strengthen GBP by reassuring bond markets. Conversely, growth concerns could put downward pressure on Sterling.
- Office for Budget Responsibility (OBR) forecasts: Any downgrades to productivity or GDP could impact exchange rate sentiment.
- BoE policy expectations: A tighter fiscal stance may reduce inflation pressure, increasing the likelihood of interest rate cuts — another potential FX mover.
Trade, Duties and Sector Pressures
While the Autumn Statement is not a trade treaty, it often includes indirect measures that impact UK importers and exporters.
Expected themes this year:
- Fuel duty unfreeze: Widely expected, this would raise transport costs and affect logistics-heavy sectors.
- VAT threshold adjustment: Any lowering could draw more SMEs into the VAT net — a direct cost implication.
- Business rates: Reductions to current reliefs are likely, especially for smaller firms.
- R&D and export support: Some targeted investment or incentives may be included, especially for advanced manufacturing or green sectors.
Trade-related commentary is also expected around:
- UK–India FTA status
- New UK–EU compliance simplification in agrifood and logistics
- Post-Brexit supply chain pressures
The Macroeconomic Backdrop
As of November 2025:
- UK inflation sits at 3.8% YoY — the highest in the G7
- GDP growth slowed from 0.7% in Q1 to 0.3% in Q2
- Unemployment reached 4.8%, its highest since 2021
- The BoE Bank Rate remains at 4.00%, though expectations of future cuts are growing if fiscal drag is signalled
If the Autumn Statement leans hawkish (e.g. through tax hikes or sharp spending cuts), the BoE may feel more room to ease policy earlier in 2026, potentially lowering borrowing costs but weakening GBP. Conversely, if stimulus measures surprise markets, the BoE might remain cautious — keeping rates high to control inflation.
FX Strategies for Importers and Exporters
In volatile policy weeks, CFOs and finance leads should prioritise currency protection. Here’s how:
- Forward Contracts: Secure a fixed GBP rate for future payments (e.g. supplier invoices or repatriated revenues).
- Stop-loss / limit orders: Guard against overnight moves post-Statement, or capture brief rate improvements.
- Currency Netting: Offset receivables/payables in the same currency to reduce total market conversion exposure.
- Regular Reviews: Update hedge ratios or review exposure maps post-Budget for potential repricing.
- Scenario Planning: Run FX stress tests assuming +/-5% GBP movement in response to the Statement.
Millbank FX recommends all clients book a policy review call ahead of major fiscal events, ensuring any exposure into early 2026 is properly covered.
Conclusion
The 2025 Autumn Statement has not yet been released — but GBP markets are already preparing for impact. From fuel duty to growth forecasts, the ripple effects will reach into cost bases, supplier contracts, and pricing strategies.
FX risk can’t be eliminated entirely, but it can be managed effectively. Tools like forward contracts, market orders and netting reduce uncertainty and protect your margins. With volatility likely on and after 26 November, now is the time to revisit your hedge policy and talk to a trusted advisor.
Sources:
Office for National Statistics – UK macro data
Bank of England – Interest rate history & statements
HM Treasury – Budget briefing timeline
BDO, Wise, Santander UK – Sector and policy briefings
CurrenciesDirect – FX and market commentary
IFX Payments – GBP volatility reports
