Gilt prices soar as government brings in 'unprecedented' sales reduction

Sales fell after Autumn Budget

The UK Debt Management Office has cancelled more than half of the remaining gilt auctions for this fiscal year – an “unprecedented” reduction.

The country's budget, published on 27 October, saw remaining gilt sales for 2021-2022 fall by £57.84bn to £194.8bn. As of the end of the first quarter, the total market size of UK gilts stood at just under £2trn. As the Autumn Budget was rolled out during Chancellor Rishi Sunak's speech, gilt yields began falling. When plans to cut debt sales were announced, gilts staged their biggest one-day rally since March 2020, when the Bank of England restarted its quantitative easing programme, according to reports. A Reuters poll of gilt-trading banks said markets had been forecasting a dro...