UK 10-year gilt yields fell further below 5.3%, reaching their lowest level since September 22, after Chancellor John Healey’s first budget met the government’s self-imposed borrowing rules and largely reassured investors, with little of the market volatility seen around previous fiscal announcements. Delivered on Wednesday, the budget included spending plans broadly in line with expectations and few surprises for markets. Healey said the government would use part of its fiscal headroom, now reduced to GBP 15 billion from an earlier estimate of GBP 24 billion, to meet its main fiscal target while continuing efforts to restore public finances amid the economic fallout from the Iran conflict. Meanwhile, money markets are almost fully pricing in a Bank of England rate hike on November 5, followed by further increases in February and July, with a 50% probability of another move by December 2027, amid persistent inflation above the BoE’s target and stronger-than-expected economic data.