Bank of America Global Research previews next week's UK Autumn budget due on Oct-28.

"With France the epicentre of market focus, it may be easy to forget that we are a little over 1 week away from the first John Healey Budget. The sense of anticipation (and perhaps apprehension) that has greeted recent Budgets is so far lacking and GBP seems agnostic to upcoming developments at least in the spot FX space. GBP/USD 1mth volatility is trading higher but this reflects the broader step adjustment in G10 FX vol vs USD as France dominates. Our options desk, however, notes that whilst front end vol remains well behaved, daily vol for GBP/USD is 13vol versus an average of 7.5vols. Whilst Budget Day appears well owned, GBP risk premium is close to the lows of the year," BofA notes.

"All in all, our economists think that the Government will deliver a cautious Budget and adhere to the Fiscal Rules. Tougher decisions await but this is for 2027 and not the here and now," BofA adds.