UK Bond Yields Drop as Reeves' Tax Hike Signals Weigh on Pound Sterling

UK bond yields fell as Chancellor Rachel Reeves confirmed her commitment to fiscal rules, but the pound sterling weakened amid signals of an impending income tax hike.

• Yields on UK government bonds, or gilt-edged securities, decreased by as much as six basis points, reaching 4.38%, while the 30-year yield dropped to 5.15%.
• Chancellor of the Exchequer Rachel Reeves emphasized her ironclad commitment to fiscal discipline, which influenced the decline in borrowing costs but pressured the pound sterling.
• Despite the drop in gilt yields, the pound sterling faced additional pressure as Rachel Reeves outlined plans for an income tax hike, signaling future financial constraints.