Reeves Budget Does Just Enough to Keep Markets at Bay

Given how UK Chancellor of the Exchequer Rachel Reeves’s budget presentation started — with the premature release of key data by the Office for Budget Responsibility and the tax increases she was ready to roll out — it all could have ended a lot worse.

But for now, the bond market vigilantes are mostly happy, sending long-maturity gilt yields - an arbiter of whether the numbers stack up — lower: Supply was cut for maturities beyond 20 years by the Treasury’s Debt Management Office, which continues to be Reeves' secret weapon in keeping the gilt market onboard. A marginally higher borrowing remit of £307 billion ($406 billion) for the coming financial year is about what the market had expected.