UK Gilt Yields Fall to One-Month Lows
UK 10-year gilt yields fell below 5.3%, reaching their lowest level in over a month, a day after Finance Minister John Healey unveiled a cautious budget aimed at supporting households facing global economic pressures. Healey reaffirmed the government’s commitment to its fiscal rules, announcing tax increases on banks, gambling, savings, and landlords, alongside tighter VAT rules for online marketplaces and measures to cushion households from rising energy bills. He also said the government would use part of its fiscal buffer, now reduced to £15 billion from a previous estimate of £24 billion, to meet its main fiscal target while maintaining efforts to repair public finances despite the economic fallout from the Iran conflict. The budget did little to alter market expectations for the Bank of England’s policy meeting next week. Money markets are fully pricing in a rate hike on November 5, with a second increase expected by February.
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UK 10-year gilt yields fell below 5.3%, reaching their lowest level in over a month, a day after Finance Minister John Healey unveiled a cautious budget aimed at supporting households facing global economic pressures. Healey reaffirmed the government’s commitment to its fiscal rules, announcing tax increases on banks, gambling, savings, and landlords, alongside tighter VAT rules for online marketplaces and measures to cushion households from rising energy bills.
He also said the government would use part of its fiscal buffer, now reduced to £15 billion from a previous estimate of £24 billion, to meet its main fiscal target while maintaining efforts to repair public finances despite the economic fallout from the Iran conflict. The budget did little to alter market expectations for the Bank of England’s policy meeting next week. Money markets are fully pricing in a rate hike on November 5, with a second increase expected by February.