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UK Bonds Fall After Government Delays Fiscal Plan To Next Month

UK bonds fell as the government delayed its fiscal plan due next week, prolonging uncertainty weighing on the nation’s fragile markets.

Rishi Sunak, UK prime minister, delivers his first speech after becoming prime minister outside 10 Downing Street in London, UK, on Tuesday, Oct. 25, 2022. "Right now our country is facing a profound economic crisis" Sunak said shortly after becoming the first person of color to lead the British government and its youngest premier in more than two centuries.
Rishi Sunak, UK prime minister, delivers his first speech after becoming prime minister outside 10 Downing Street in London, UK, on Tuesday, Oct. 25, 2022. "Right now our country is facing a profound economic crisis" Sunak said shortly after becoming the first person of color to lead the British government and its youngest premier in more than two centuries.

UK bonds fell as the government delayed its fiscal plan due next week, prolonging uncertainty weighing on the nation’s fragile markets.

The yield on 30-year bonds rose as much as 14 basis points to 3.81% after new UK Prime Minster Rishi Sunak delayed an economic strategy planned for Monday to Nov. 17. 

While the government has backtracked on plans for expansive fiscal stimulus and vast unfunded tax cuts that sent markets into turmoil last month, investors are still eager to see the final numbers.

The event will be accompanied by a full forecast from the Office for Budget Responsibility, a move that will likely go some way to soothing market nerves. Liz Truss’s decision not to provide one compounded the selloff.

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