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Bond investors give budget the thumbs up<\/p>\n
By the end of the day, UK bonds had recovered more ground as investors welcomed the UK\u2019s new fiscal outlook.<\/p>\n
The news that the chancellar has doubled her budget headroom to over \u00a320bn helped to spark a rally in gilts today.<\/p>\n
The 10-year UK bond yield fell by 11 basis points, to 4.42%, while 30-year yields fell by 11bps.<\/p>\n
Deutsche Bank analysts have spotted that this was the best Budget day for UK government debt, compared to German and American debt, in almost 20 years!<\/p>\n
They report:<\/p>\n
At first glance, the gilt market likes what it heard from the Chancellor today.<\/p>\n
In fact, benchmarked relative to Bunds and US Treasuries, at the time of writing today marks the largest fall in 10y gilt yields on the day of a UK budget or major fiscal statement since 2006.<\/p>\n
Not everyone is happy, though \u2013 several gambling firms have warned that the taxes announxed today will hit their profits, and lead to job losses in the sector.<\/p>\n
Danni Hewson, AJ Bell head of financial analysis, says:<\/p>\n
\u201cInvestors were quick to cotton onto the fact that they wouldn\u2019t have to wait for the chancellor to get to her feet to find out exactly what her Budget had in store. Within minutes of the OBR publishing its fiscal outlook early, markets were passing their real-time assessment of what they were reading \u2013 weak growth, chunky tax and spend measures, but the much-vaunted fiscal prudence intact.<\/p>\n
\u201cThere was a brief rally in gilts thanks to better-than-expected fiscal headroom, with yields dropping and prices rising on short and long-term UK government bonds before moving back. The lack of a gilt market sell-off was reassuring, and overall the contents of the Budget struck a broadly positive tone with investors once they\u2019d had time to digest the key facts.<\/p>\n
Our Politics Liveblog (where I\u2019ve been moonlighting this afternoon) has all the action:<\/p>\n
Goodnight! GW<\/p>\n
Share<\/a><\/p>\n Here\u2019s everything important that happened during a madcap budget day:<\/p>\n Share<\/a> In the Canary Wharf offices of Saxo UK there is a race to understand the implications of the leaked forecasts – mixed with laughter at the hapless Office for Budget Responsibility.<\/p>\n As well as sterling, there was some movement on UK bond markets after the leak. The yield on the benchmark 10-year gilt – a measure of the cost of government borrowing – dropped quickly from 4.5% to about 4.42%. Yet a few minutes later it was back up above 4.52%.<\/p>\n Will Marsters, a sales trader at Saxo UK, said:<\/p>\n \u201cThe initial reaction was to come off yields quite a bit, but once the market digested it, it came back.\u201d<\/p>\n Traders are trying to work out if chancellor Rachel Reeves\u2019s plans seem credible – which would reduce the chance of higher bond yields. Marsters said:<\/p>\n \u201cThe tempered growth didn\u2019t seem too optimistic, which eroded some of the risk premium. But now everyone is just trying to digest.\u201d<\/p>\n However, Neil Wilson, investor strategist, said there was an assumption of tighter spending later in the parliament.<\/p>\n \u201cYou\u2019re saying we\u2019re going to buy fiscal restraint by the end of the parliament – \u2018Don\u2019t worry about welfare – we\u2019ll sort it out.<\/p>\n Share<\/a><\/p>\n Updated at\u00a007.55 EST<\/p>\n Follow Rachel Reeves\u2019 budget as it happens, and all the details of the mistakenly released OBR forecasts, with Graeme Wearden and Andrew Sparrow on our politics live blog:<\/p>\n Share<\/a>Betting firms’ shares fall on higher taxes<\/p>\n Gambling companies are to face higher taxes, the OBR confirms.<\/p>\n Its accidentally released economic and fiscal outlook says:<\/p>\n Several changes to gambling duties have been announced in the Budget which overall are estimated to raise \u00a31.1 billion by 2029-30. From April 2026 there will be an increase in remote gaming duty from 21 to 40 per cent and abolition of bingo duty from its current 10 per cent rate.<\/p>\n This has hit the share price of betting companies.<\/p>\n Shares in Entain, whose brands include Ladbrokes, Coral and BetMGM, have fallen by 4.44%<\/p>\n Evoke, the firm behind William Hill, 888, and Mr Green, are down 14.5%.<\/p>\n Share<\/a>Growth forecasts cut as OBR downgrades productivity view<\/p>\n The accidentally released OBR report shows that growth will be weaker than previously forecast.<\/p>\n Real GDP is forecast to grow by 1.5% on average over the forecast, 0.3 percentage points slower than projected in March, \u201cdue to lower underlying productivity growth\u201d.<\/p>\n The OBR says it has (as expected) lowered its estimate:<\/p>\n We have reduced our central forecast for the underlying rate of productivity growth in the medium term to 1.0 per cent, 0.3 percentage points slower than in our March forecast.<\/p>\n Share<\/a><\/p>\n The OBR\u2019s new report<\/a> has now vanished from its website, replaced with a 404 Not Found error. Presumably it will be back at 1.30pm\u2026.<\/p>\n Share<\/a>In the City, OBR report causes excitement At the London offices of Saxo UK on Wednesday morning, observers would have been forgiven for forgetting that Rachel Reeves was preparing to announce her second budget – until the apparent accidental early release of the government\u2019s official economic analysis moved the markets.<\/p>\n The value of the pound immediately jumped after the forecasts showed tax rises of \u00a326.1bn by 2029-30, and growth of 1.5% over the next five years.<\/p>\n Sterling rose briefly from $1.3160 to $1.32, as investors scrambled to digest the leak.<\/p>\n Sitting on the 26th floor of a tower in London\u2019s Canary Wharf financial district, Neil Wilson, investor strategist at Saxo UK, said:<\/p>\n It\u2019s not a ginormous move, but in a minute it\u2019s a noticeable spike. It has retraced a bit now.<\/p>\n [the pound\u2019s now slipped back to $1.313]<\/p>\n There was general excitement as the Office for Budget Responsibility, the government\u2019s forecaster, accidentally published its full analysis two hours early.<\/p>\n \u201cBoom! There\u2019s your 200-pager,\u201d said Will Marsters, a sales trader, as the full report was published.<\/p>\n Share<\/a><\/p>\n Updated at\u00a007.55 EST<\/p>\n OBR: Child benefit cap ended, personal tax thresholds frozen<\/p>\n Astonishingly, the OBR\u2019s latest Economic and fiscal outlook has indeed been published early on the fiscal watchdog\u2019s site. You can see it here<\/a>.<\/p>\n The report confirms that the two-child limit is being lifted, at a cost of \u00a33bn, which will the OBR says will increases benefits for 560,000 families by an average of \u00a35,310.<\/p>\n There are also personal tax rises with a combined yield of \u00a315 billion in 2029-30.<\/p>\n The OBR says:<\/p>\n These include: freezing tax thresholds from 2028-29 onwards, which raises \u00a38.0 billion in 2029-30 and contributes to around 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate taxpayers by 2029-30 than in the March forecast; charging National Insurance on salary-sacrificed pension contributions, which raises \u00a34.7 billion; and increasing tax rates on dividends, property and savings income by 2 percentage points, raising \u00a32.1 billion.<\/p>\n![\"Jasper](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/11\/1764188901_175_Jasper_Jolly.png\")
Jasper Jolly<\/p>\nJasper Jolly<\/p>\n