Bond market braced for rise in UK debt issuance to £300bn this year

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Investment banks pencil in second-biggest annual gilt sales figure on record ahead of Labour’s first Budget

Global investment banks expect UK debt sales this year to rise close to £300bn, the second-highest on record, as the government heads for a showdown with bond investors at this week’s Budget. Gilts are on track for their worst month since April as unease over a proposed loosening of the country’s borrowing rules adds fuel to a recent sell-off. The benchmark 10-year gilt yield climbed as high as 4.29 per cent on Monday, its highest since early July, before falling back to 4.25 per cent.

As well as the closely watched borrowing requirement for the current fiscal year, investors will also be updating their estimates of gilt issuance for the coming years, after chancellor Rachel Reeves confirmed last week that the government would change its debt rule to permit more investment.

 

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