U.K. Government Bonds Take Hit From Johnson’s Spending Plans
- DMO to sell extra 14 billion pounds of gilts in 2019-2020 year
- Bigger fiscal spending may reduce chances of BOE rate cut
Photographer: Chris Ratcliffe/Bloomberg
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U.K. sovereign bonds slid as markets started to factor in plans for greater spending by Boris Johnson’s new government.
The securities led losses across Europe after the U.K.’s Debt Management Office said on Tuesday that gilt sales will increase by 14 billion pounds ($18 billion) in the 2019-2020 financial year, which ends in April. They pared their declines after the first sale of 2020 was oversubscribed by almost two-and-a-half times the amount on offer.