UK Bond Yields Dip Amid DMO's Lower Issuance Forecast

British government bond yields declined as the UK's Debt Management Office announced fewer bond issuances than expected for 2025/26, easing market concerns. The 30-year government bond yield decreased by 7 basis points to 5.298%. The pound weakened, and the FTSE 100 index showed modest growth.

UK government bond yields experienced a decline after the Debt Management Office announced lower-than-anticipated bond issuances for 2025/26, alleviating market worries. The 30-year gilt yield dropped 7 basis points to 5.298% following Finance Minister Rachel Reeves' fiscal update.

The British pound's value slightly weakened, dropping 0.5% to stand at $1.2883. In a move that surprised economists, the DMO revealed a gross gilt issuance forecast at 299 billion pounds, contrary to the 304 billion pounds predicted by banks in a Reuters poll.

Additionally, the UK's 2-year government bond yield also fell by 7 basis points to 4.229%. Meanwhile, the FTSE 100 index saw a fractional rise of 0.3%, maintaining gains even as broader European markets experienced a minor dip.

(With inputs from agencies.)