The U.K. Treasury had previously confirmed the tax cut would lead to an average £10,000 saving for 660,000 people.''The U-turn only accounts for a small part of the equation in terms of the planned tax cuts, and was clearly made to limit further political fall out," she told CNBC, adding that markets are still factoring in a benchmark interest rate rise to at least 5.5% next year.
Rate hike expectations on the Bank of England, which next meets Nov. 3, rose sharply after the budget announcement on Sep. 23, with the pound falling in value and the"The greatest part of the borrowing that came from the 23 September mini-budget is still unfunded," Jane Foley, senior FX strategist at Rabobank, told CNBC's"Squawk Box Europe."
Despite speculation that the government will be looking at what else it might cut, its decisions may not be easy or popular, Foley said. Meanwhile, the Bank of England's emergency asset-buying program, which has supported markets over the last week, would eventually end.