Metis AM
As the Autumn Budget approaches, and speculation around upcoming changes continues, investors may be feeling uncertain of what the next few months could hold for share prices.
Speaking at the Labour Party Conference in September 2025, chancellor Rachel Reeves warned of hard decisions to come, the Independent reports.
As the government seeks to generate an estimated £40 billion to help close the UK’s fiscal gap, spending cuts and tax increases seem inevitable. Often, fiscal policy decisions have an impact on the stock market.
The details of the Autumn Budget will remain unknown until 26 November 2025. But by understanding what changes could be made and how they might impact UK markets, you can prepare for any pre- or post-Budget volatility.
So, read on to discover what changes could be included in the Budget, how your investments could be affected, and the benefits of staying the course if share prices fall.
A boost to investment activity could cause share prices to rise
Starting with the positives, Reeves has been vocal about her desire to get more people investing, rather than saving, to help boost the economy.
According to the Guardian, the chancellor was expected to announce changes to the tax-efficient Cash ISA allowance in July 2025. Aiming to reduce the amount savers can pay into their Cash ISAs tax-efficiently, Reeves had hoped to divert more wealth into Stocks and Shares ISAs.
After lobbying from banks, building societies, and consumer groups, the plans were put on hold. However, the proposal could potentially be revived in the upcoming Autumn Budget.
While a reduction to the Cash ISA allowance is unlikely to have an immediate impact on share prices, if Reeves succeeds in transferring more wealth from savings accounts to the stock market, demand for stocks and shares could rise. As a result, investors could see values increase over the medium to long term.
Changes to Capital Gains Tax could diminish investor returns
With Reeves pledging not to increase Income Tax, VAT, or National Insurance (NI), Capital Gains Tax (CGT) could be in the firing line as the government looks to increase revenue.
The chancellor may be reviewing a few options for increasing CGT receipts.
- Increase the lower rate: The lower CGT rate was already increased from 10% to 18% in the 2024 Autumn Budget, and the government could increase it again in November.
- Increase asset-specific rates: Some sources have suggested Reeves could introduce higher rates for specific asset classes, such as property.
- Reduce the Annual Exempt Amount: The amount you can gain each year before paying CGT has already been reduced from £12,300 in 2022/23 to just £3,000 as of 2025/26. So, further reductions could be on the cards.
Of course, the above measures could diminish the returns you receive on your investments. With careful financial planning, you may be able to limit your investments’ tax liability to maximise your gains.
Gilt yields could rise if borrowing increases
Yields from government bonds, also known as gilts, have risen since the last Autumn Budget in October 2024. Depending on what plans for spending and borrowing are announced in November, this trend could potentially continue.
If the Budget includes increased borrowing, more gilts may be issued. With IG reporting that government borrowing hit a five-year high of £18 billion in August 2025, further borrowing is likely.
Additionally, bond prices typically trend in the opposite direction to interest rates. So, if interest rates continue to fall following the Budget, gilt values could rise further.
Share value fluctuations could vary by industry and asset class
The impact of Budget announcements on specific shares is likely to vary depending on their asset class and industry.
In sectors such as health, housing, and infrastructure development, spending announcements could boost asset values as investors gain confidence. Other industries may offer shareholders more stability regardless of economic changes, such as those supplying everyday essentials.
On the other hand, share values could drop both before and after the Budget is delivered. While some investors may begin offloading shares amid uncertainty, others may panic once changes are announced, causing share prices to drop.
Peaks and troughs are likely to smooth out over time
Ultimately, historic market trends have shown consistent and resilient recovery from such volatility, with share value fluctuations generally smoothing out over time.
Indeed, many UK share prices dropped before and after the 2024 Autumn Budget. According to Portfolio Adviser, in the month leading up to 12 November 2024, the FTSE 250 dropped by 1.35%. However, data from the London Stock Exchange (LSE) shows that values had almost recovered by December.
Even more significant downswings have historically recovered over time. For example, in December 2021, the Guardian reported the FTSE 100 had exceeded pre-pandemic levels in less than two years.
By staying the course through the uncertainty of the Autumn Budget and resisting giving in to panic as share prices fluctuate, you may benefit from the markets’ long-term recovery and growth.
You can learn more about the potential benefits of staying the course through downswings in our recent blog.
Read more: Busy doing nothing – how to stop reacting to stock market changes
Get in touch
At Metis Wealth, we can help you create an investment strategy that supports long-term growth, while maximising your tax efficiency where possible.
Contact us by emailing enquiries@metiswealth.co.uk or calling 0345 450 5670 to find out what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.