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Golden Ten Data reported on March 3 that the UK government is reducing its bond issuance to the lowest level in three years, reflecting an improvement in the country's fiscal situation. The UK Debt Management Office announced on Tuesday that it will sell £252.1 billion worth of bonds in the fiscal year starting in April. Although this figure is slightly higher than the £245 billion expected by banks in the survey, it is much lower than the £303.7 billion in the current fiscal year. While the reduction in supply is good news for bond investors, ongoing Middle East conflicts have sparked inflation concerns, which may hinder further rate cuts by the Bank of England. As a result, UK government bonds have still been sold off this week. After the announcement, the 10-year gilt maintained its earlier decline, with yields rising 15 basis points to 4.52%. This bond sale plan follows Chancellor Reeves' economic statement. Although recent fiscal statements have caused market volatility, the strengthening fiscal position and expectations of rate cuts led benchmark UK gilt yields to fall to their lowest levels since the start of 2024 last week.

Golden Ten Data reported on March 3 that after UK Chancellor Reeves announced no further adjustments to fiscal policy in the Spring Statement, the pound remained flat, and market focus shifted to the Office for Budget Responsibility's updated economic and fiscal forecasts. It is expected that the real GDP growth rate will slow to 1.1% this year, then rise to 1.6% in 2027 and 2028, and remain at 1.5% in both 2029 and 2030. The inflation rate is expected to fall to 2.3% this year and reach the Bank of England's 2.0% target from 2027 onwards. However, the Office for Budget Responsibility pointed out that its forecasts face "significant risks" due to the Middle East conflict.

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