Every Budget preview runs through the same speculative list: capital gains tax, a wealth tax, a bank windfall tax, property reform. Everything is always "under consideration".
However, the PM has already told us where he thinks the tax system is wrong.
"We over-tax labour, people's work, and we under-tax people's assets."
If that is the Government's guiding philosophy for the upcoming Budget, then the list of potential tax-raising opportunities gets whittled down rather quickly.
Labour has pledged not to raise the rates of income tax, VAT, corporation tax or National Insurance. Rule those out and the politically available targets become remarkably clear: capital gains, wealth, property and bank profits.
Most of which have one thing in common. They are owned by, or ultimately connected to, the capital markets. Making the London Stock Exchange an unlikely potential casualty of this Budget.
Not because the Government is going to tax the LSE itself. But because many of the companies and investors most exposed to the measures being considered are disproportionately represented on it: banks, property companies, shareholders and businesses whose attractiveness depends heavily on the treatment of capital gains and dividends.
There is recent precedent for just how quickly this can move markets.
Bank shares have previously shown that a Budget headline can add or wipe out billions of pounds of market value almost instantly. Investors don't generally wait for legislation to take effect. They price the probability of the tax into shares first.
That makes this an interesting moment for Burnham. If you tell investors that labour is over-taxed, but assets are under-taxed, and then spend your first Budget looking for ways to tax those assets, you may get the revenue you want.
But you may also change the relative attractiveness of owning UK assets. You could even end up with the Treasury trying to extract more from the very capital base it wants London to attract.
While everyone is asking which tax is going up, the more pertinent question is: what happens to the value of the assets affected by those taxes?
The Budget may not be an attack on the London Stock Exchange. But it could certainly be a test of how much tax an already unloved UK equity market can absorb before investors decide there are better places to allocate their money.
The question isn't just how much the Treasury can extract. It's how much capital it can possibly scare away in the process.
BRIEFLY
Oil jumped sharply overnight (Brent +2.4% to $107.41/bbl & WTI +2.54% to $102.34) after fresh Houthi attacks on Saudi Arabia, new strikes in the Strait of Hormuz and Saudi Arabia halting its East-West pipeline. That pipeline is the fallback route with Saudi Arabia now unable to access three of its major export routes at once. Planned talks between Iran and Gulf powers over the strait have also been delayed, adding to the uncertainty.
Newspaper reports suggest Reform UK has received circa £72m in donations, believed to be the largest political donation in British history. The FT reports Housing secretary Angela Rayner has hinted at a donations cap, despite ministers voting down a £100k a year cap amendment only last week. Any change would reportedly be backdated, potentially leaving the legal status of Reform's money in question. Reform's Robert Jenrick says the party doesn't believe it would have to return the funds, calling them "entirely in line with the law."
WEEK AHEAD
Kier: Final Results on 15 Sept. Insight into the construction and infrastructure sectors.
Barratt Redrow: Final Results on 16 Sept. The housebuilders have suffered a torrid 2026, with BTRW itself down just shy of 25%. These Results will be a good indicator of whether higher energy costs and goods inflation are really baked into the system and if the rate outlook is actually denting housing demand or not.
Next: Interim Results on 17 Sept. A genuine bellwether for UK retail. Historically, NXT's updates routinely move market sentiment and are seen by most as being the most reliable results read on the health of the UK consumer.
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