UK Bonds Fall as Reeves’ Budget Points to More Debt And Stimulus
- The new issuance plan is the second-largest on record
- Yields jump after Reeves’ budget in volatile trading session
The Bank of England in London.
Photographer: Betty Laura Zapata/BloombergThis article is for subscribers only.
UK bonds fell as investors were unnerved by the government’s plans to fund investment and stimulate the economy, which could mean interest rates stay higher for longer.
The yield on two-year bonds jumped as much as 13 basis points after the Debt Management Office announced £297 billion ($386 billion) of government bond sales in the fiscal year. While that was only slightly higher than expectations, investors pointed to official projections that imply around an extra £142 billion of borrowing over the next five years.