This week in UK financial news, several key developments are shaping the economic landscape:

Autumn Budget Speculation: There is growing anticipation around the upcoming Autumn Budget, scheduled for October 30. The Labour government, under Chancellor Rachel Reeves, is expected to increase capital gains tax, particularly targeting share sales, as part of efforts to close a £40 billion fiscal gap. This move has sparked uncertainty among investors and wealth managers, with reports of people withdrawing pension funds to avoid potential tax changes.

Interest Rates and Inflation: Inflation in the UK has begun to ease, now at 1.7% drop from 2.2% it is now below the Bank of England’s 2% target. This development has raised expectations that the Bank may cut interest rates as early as next year. However, with inflation still a concern globally, central banks remain cautious.

Business Tax Relief: Investors are also concerned about the potential abolition of business tax reliefs, which are under review in the forthcoming Budget. This could significantly impact small and mid-cap companies that rely on such incentives​.

This brings a mix of hope for lower inflation, but also concern over tax changes and their broader economic impacts.

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