Many people are probably wondering what Britain’s most important and painful budget in decades will mean for the UK pound. Well, don’t ask analysts in the foreign-exchange market, because their predictions are all over the map. But here’s a sample of what they’re saying and why.

First, some stage-setting. At 12:30 p.m. in London, UK Treasury chief George Osborne will likely announce major spending cuts and tax increases in an effort to close Britain's double-digit budget deficit, which will be the biggest in the 27-member European Union this year, according to the European Commission. Mr. Osborne fears that with a debt crisis roiling Europe, Britain will be vulnerable if it doesn't do enough to fix its finances and win the confidence of credit-ratings agencies.