A credible growth plan, gilt-market discipline and a tax regime that keeps talent in London top the wish list as John Healey prepares his first Budget

John Healey delivers his first Budget on Wednesday under mounting pressure to find new revenue and close an expected fiscal hole. The finance industry fears a windfall tax. JPMorgan Chase chief Jamie Dimon, who helped talk Rachel Reeves out of higher bank taxes last November, made the case in Downing Street last month.

Banks are not the only corner of finance watching closely. Hedgeweek® asked hedge fund managers what a healthy Budget for the UK should look like. Their answers range well beyond their own tax bills, from gilt-market credibility to housebuilding and devolution. Here are their main requests.

Treat UK plc like an investment case

Adrian Vlad, founder and portfolio manager at Hegel Capital, says he assesses the chancellor the way he would any company in his portfolio. On that basis, the UK has a strong franchise but a stretched balance sheet, with debt interest close to 4% of GDP. That is more than most government departments spend.

“No company cuts its way out of that position. It grows out of it,” he says. “So I want a growth plan, not a list of tweaks. Where will the UK be in five years? Which sectors will drive it, and how will planning, energy costs and capital markets reform get investment flowing?”

Vlad wants that paired with honest answers on defence, the triple lock and social care, which he argues would start to shrink the debt relative to the economy. “Headroom against the fiscal rules is a buffer, not a strategy,” he says. “Give investors a reason to own the UK, not just to tolerate it.”

Put the gilt market first

For Igor Yelnik, CIO and CEO of Alphidence Capital, credibility with bond investors matters more than any short-term giveaway. He points to debt above £3tn and an April to September deficit £6bn worse than the Office for Budget Responsibility expected. CPI inflation is at 3.5% and forecast to peak near 4.1%.

“Chancellor Healey has little room for manoeuvre,” he says. “He needs a credible path that shows debt falling as a share of GDP: realistic growth assumptions, restrained current spending and measures that support private-sector investment rather than further demand stimulus.”

Yelnik expects bond investors to deliver their verdict quickly. “Any perception of fiscal slippage may put gilts in harm’s way,” he says. He is not optimistic about the outcome. “The chancellor appears to understand the predicament, yet seems more inclined to tax ‘the rich’, directly or indirectly, than to restrain spending. I therefore expect a Budget that avoids short-term market disruption but proves damaging to the economy over the longer run.”

Stop driving talent and capital out of London

The clearest point of agreement is on tax for individuals. Managers want Healey to resist measures that would push founders, high earners and investment professionals to leave. The Financial Times has reported similar lobbying by venture capital firms and tech founders against higher capital gains tax and exit charges.

Yelnik warns against any raid on carried interest, capital gains or recent arrivals to the UK. “Such moves would simply accelerate the exodus of talent and capital from London,” he says. “Surgically targeted incentives and the abolition of inheritance tax would do more for growth than higher rates that deter the very people the City needs to retain.”

Dr Tillmann Sachs, founder and CIO of J8 Capital, admits to a degree of self-interest but is clear on priorities. “A healthy budget is everything that makes business easier and keeps wealth and success in the UK,” he says. “So low tax, no punishment of non-doms, no exit tax.”

Fahd Ahmed, CEO and co-founder of Iguana Investments, wants the UK to become “more accommodative to risk takers and business owners”. He suggests a revised version of the non-dom regime and tax breaks for founders and for those returning to the UK, all supported by a simpler tax system.

Bring money back into UK equities

Ahmed also wants the Budget to address the long drift of capital away from the London market. The London Stock Exchange has called for stamp duty on share trading to be scrapped, and Ahmed suggests a stamp duty holiday as a starting point.

“Temporary is fine to gauge investor behaviour and thereon extend,” he says. He would pair it with lighter regulatory burdens for retail investors buying UK equities and a government-led campaign to educate the public on personal investing.

Fix productivity and spread the power

Ahmed deliberately sets aside the familiar debates over the bond market and fiscal credibility. He focuses instead on what he sees as the UK’s deeper problem: weak productivity, which he believes needs cross-party review and consensus. He wants investment in energy and transport infrastructure, planning reform and a push on housebuilding, with targets and minimum thresholds for new builds. Ahmed stresses the views are his own rather than those of Iguana Investments or its portfolio.

Sachs, drawing on his German background, argues that the UK is held back by how centralised it is. “I believe a country is stronger if it’s decentralised,” he says. “I believe in devolution and in strong decision-making powers, including budget powers, away from central government.”

He is frustrated that centralised services have not delivered better education, health and social wellbeing, and he sees that as more than an efficiency problem. “The UK is a very unfair society, and if you’re poor, you stay poor,” he says. “That is not how it’s supposed to be.”