"Rachel Reeves' reckoning will come from gilt markets"
"Today's Budget speech is only the first act. The real judgement arrives the moment investors see the OBR's updated revenue profile, growth assumptions and borrowing outlook. The gilt market will decide whether the UK's fiscal path is durable or whether the risk premium needs to rise."
"Investors analyse the OBR's tables with extraordinary precision. They examine the growth path, the revenue base and the implied borrowing pressure across the forecast window. These numbers guide expectations for supply, sustainability and long-term pricing."
The Chancellor will deliver the Budget as investors await the Office for Budget Responsibility's updated revenue profile, growth assumptions and borrowing outlook. UK sovereign debt trades toward the upper end of its recent range while UK 10-year yields remain elevated after earlier multi-year highs. The refinancing requirement exceeds £260 billion for the fiscal year and traders expect a heavy gilt issuance programme. Markets anticipate a range of tax adjustments to close a £20 billion gap, but the OBR's numbers will shape expectations for supply, sustainability, and long-term pricing. Prior OBR verdicts have triggered renewed gilt selloffs and rising yields.
Read at London Business News | Londonlovesbusiness.com
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