Barclays_Global_Portfolio_Manager_s_Digest_Budget_Crunch

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.* This individual is a member of the Product Management Group and is not a Research AnalystAll research referenced herein has been previously published. You can view the full reports,including analyst certifications and other important disclosures, by clicking the hyperlinks inthis publication or by going to our Research portal on Barclays Live.FOR ANALYST CERTIFICATION(S) PLEASE SEE PAGE 22.FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 22.FOR IMPORTANT FIXED INCOME RESEARCH DISCLOSURES, PLEASE SEE PAGE 23.Global Portfolio Manager's DigestBudget CrunchWe provide context and perspective on research acrossregions and asset classes, this week providing our thoughtson the UK Budget; we review 3Q earnings season in the USand set the stage for YE; and we provide our 2026 outlook forEuropean interest rates.• UK Autumn Budget: The chancellor delivered a budget that increased spending in each yearof this parliament, but was more than offset with backloaded tax increases, focused onfreezing income tax thresholds, applying NIC to salary sacrificed pension contributions and arange of smaller tax measures. While the extent of headroom against the fiscal rules is largerthan we had expected, the backloaded nature of tax increases raises questions aboutdeliverability, in our view. From a rates perspective, we note that the pivot to heavier shortsupply is now showing up as material rises in gilt redemptions in the forecast period. Themedium-term fiscal picture remains unclear, clouded by both rising redemptions andoptimistic revenue assumptions. Pertaining to the pound, the budget generates scope for an,at least partial, unwind of its risk premium, in our view. And lastly on the equity markets,while sector-wise implications have been mixed, we believe a worst-case scenario has beenavoided in most cases with not many unexpected surprises.• Learnings from 3Q Earnings: EPS growth in 3Q was strong at +15.2%, sales growth improvedQ/Q to +6.8%, and breadth and depth of surprise once again came in above the LT trend. BigTech EPS growth in particular accelerated to 32% from 28% last quarter, but SPX ex-Tech alsodelivered 9% Y/Y growth thanks to Financials, Materials and Industrials