The Debt Management Office's revised remit raises planned gilt sales for 2026-27 by £4.4bn to £250.6bn, up from £246.2bn in April. The figures come from Brown Brothers Harriman (BBH), via FXStreet, and Jefferies, via Investing.com. The numbers add up.
Jefferies says long-dated gilt sales are cut by £6.9bn to £15.5bn. Analysts say this helped the market. HSBC said ten-year gilt yields fell 2 basis points.
BBH estimates the cyclically adjusted primary balance moves from -0.3% of GDP in 2026/27 to +0.5% in 2027/28. That is a fiscal drag of 0.8% of GDP, compared with 0.6% in March. BBH judges the extra tightening too small to change Bank of England rate expectations. It says markets still imply nearly 125bp of rate rises over the next twelve months.
Deutsche Bank and Capital Economics say the Budget left headroom lower than in the spring, mainly because higher interest rates raised debt costs.
Elias Haddad of BBH said: "The UK October 2026 Budget presented yesterday is neutral for GBP and gilts."