FX.co ★ UK 10-Year Gilt Yield Rise on Early OBR Report

The yield on the UK 10-year government bond rose to 4.55% following an inadvertent early disclosure of the budget forecast by the Office for Budget Responsibility, ahead of Chancellor Rachel Reeves's address. The report highlighted a fiscal buffer of £22 billion, surpassing the expected £15 billion. Despite this positive note, the forecast projected lower GDP growth for 2026 and a slight uptick in inflation, leading to varied market reactions. The OBR outlined several tax hikes, including increased gambling duties, a levy on properties valued over £2 million, and a 2% rise in dividend tax rates, collectively estimated to raise £26.1 billion in revenue by 2029-30. Furthermore, it confirmed the freezing of income tax and national insurance thresholds until 2030-31. The markets responded with volatility due to the atypical early release of the forecast.