British Bond Yields Tumble After Reduced Issuance Plans Unveiled

British government bond yields dropped following Finance Minister Rachel Reeves's fiscal statement, as plans for lower-than-expected bond issuance alleviated market concerns. Britain's 10-year bond yield fell 5 basis points, with spending cuts intended to stabilize the market by calming jittery investors.

The British government witnessed a dip in bond yields on Wednesday as the Finance Minister, Rachel Reeves, announced her spring fiscal statement. A reduced bond issuance plan revealed in the announcement mitigated investor fears of oversupply in the market, easing pressure on yields.

The UK's Debt Management Office unveiled plans for a £299 billion gilt issuance for 2025/26, below the anticipated £304 billion. This announcement brought relief to the long-end bond market, pushing the benchmark 10-year bond yield down 5 basis points to around 4.71%.

Despite an initial rise in yields as Reeves addressed economic growth forecast cuts and mounting borrowing, her proposed spending cuts aim to restore financial stability. Sterling dipped slightly after her statement, with broader economic impacts observed in the stock market and on rate expectations.

(With inputs from agencies.)