LONDON, Nov 22 Reuters Britain39;s finance minister on Wednesday announced a raft of measures aimed at reviving the sluggish economy without upsetting markets, but a degree of caution over the outlook for borrowing and inflation rattled bonds and sterling.

Nerves about cuts to social security payments were minor. Traders had feared a broader set of hardtofund giveaways.

Sharply lower growth forecasts for 2024 kept sentiment on sterling tepid, while some pockets of the stock market got a fillip from business investment and tax relief measures.

This was Hunt39;s second Autumn Statement since he replaced Kwasi Kwarteng, who was fired last year in the wake of a minibudget packed with underfunded tax cuts that unleashed UK market turmoil.

Investors cautioned that tax breaks would not be sufficient to raise business investment while UK interest rates stayed high.

The country needs massive investment and the only way you are going to get that is if financing costs become much cheaper, said Leigh Himsworth, UK portfolio manager at Fidelity International.

BUSINESS BOOST

UK investors went into this budget concerned about a government doing badly in the polls seeking to raise its popularity with heavy spending that could increase inflation and ultimately interest rates already at a 15year high of 5.25.

There was a risk of reduced tax rates that would stimulate the consumer again at a time where the Bank of England has only just broken the back of services inflation, Monex…