RE: Rachael from accounts26 Mar 2025 17:59
And Gilts….cnbc
“ Following Reeves’ speech, the U.K.’s Debt Management Office announced it planned to issue £299.2 billion ($385.5 billion) in gilts for the 2025-2026 year, slightly higher than during the previous year, but just below the £304 billion estimated in a survey of financial institutions by Reuters. As anticipated, it contained a significant reduction in the proportion of increasingly less-popular longer-dated gilts, easing oversupply concerns.
“The market reaction shows the government managed to beforehand properly calibrate expectations... they’re making a point to financial markets that they won’t blithely spend and hope investors will finance it,” George Lagarias, chief economist at Forvis Mazars, told CNBC.
The size of the bond package is closely-watched since it indicates the level of supply in the market for the coming year. It is still among the biggest issuances on record, but here too Lagarias said the reaction would be favorable, given expectations.
“Gilt yields have been rising over the last weeks, but [the government] paid the price beforehand to avoid being rattled by unexpected volatility. The former you can deal with, the latter can bring down your government,” Lagarias said.”
So…..
“ U.K. borrowing costs meanwhile fell on Wednesday as markets broadly welcomed a flurry of economic news and fiscal announcements.
The yields on 2-year and 10-year U.K. government bonds were both around 3 basis points lower at 4:45 p.m. in London.
Wednesday kicked off with a U.K. inflation print which showed price rises unexpectedly cooled to 2.8% in February, fueling hopes for a more decisive path of rate cuts from the Bank of England this year and driving sterling lower against the U.S. dollar and the euro.”
Surely, surely, surely ok….. hopefully!
This should kick start a continued recovery in heavily discounted IT’s?
Trek
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