Latest News

British government bond yields fall after Sunak’s budget update

0

2/2
© Reuters. British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/ Benoit Tessier/Illustration
2/2

By Stefano Rebaudo

(Reuters) – British government bond yields extended their fall on Wednesday after finance minister Rishi Sunak gave a budget update.

Sunak cut taxes for workers and reduced a duty on fuel but Britain’s government also announced it would slash its bond sales in the coming financial year.

“Yields are dropping as the Chancellor announced a budget that doesn’t involve a significant reduction of the UK tax burden,” Kallum Pickering, senior economist at Berenberg, said.

“If you look at taxes as a share of GDP, they will rise by more than was previously expected,” he added.

UK’s 10-year gilt yields dropped 6.5 basis points (bps) on the day to 1.645%, while the interest rate sensitive 2-year yields fell 8 bps to 1.33%.

“The Chancellor has announced tax cuts that will be offset by higher nominal income,” Pickering argued. “That soothed worries about increased public spending, which might have boosted yield rise expectations.”

Britain’s government said it would take its bond sales back towards pre-pandemic levels, with the share of index-linked gilts falling to an all-time low as inflation soars.

British government bond yields fall after Sunak’s budget update

Disclaimer:Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

UK’s Sunak tries to ease cost-of-living hit with tax cuts

Previous article

Inflation in Russia spikes above 14.5%, highest since late 2015

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News