UK government budget reassures bond investors with fiscal restraint measures

Prime Minister Andy Burnham presented his first budget on Thursday, and UK government bond yields fell to their lowest level in five weeks. The 10-year gilt yield dropped to 5.25%. Investors were pleased because the budget showed careful control of public spending. Burnham has promised to be responsible with government finances since he replaced Keir Starmer in July. The government wants to balance what it earns against what it spends, not counting debt interest payments, by 2029/30. Some investors had worried earlier that Burnham might borrow and spend more freely. His previous comments suggested he wanted to rely less on bond markets. The yield is also on track for its biggest monthly fall since May.