The UK 10-year gilt yield dropped to 4.652%, its lowest in over three weeks, as investors grew cautious ahead of November’s budget and rising concerns over the country’s debt outlook. Finance Minister Rachel Reeves faces the challenge of balancing fiscal discipline with supporting growth, amid expectations of further tax hikes following her earlier £25 billion increase in employer social contributions. Analysts predict only modest growth through year-end but see inflation climbing to 4%, double the Bank of England’s target. Investors are watching upcoming employment, wage, and GDP data for clues on interest rate direction ahead of the BoE’s November 6 meeting. Money markets anticipate no rate change, with the first cut not expected until March. Persistent inflation, especially in wages and services, remains a concern. Meanwhile, global sentiment improved slightly as President Trump softened his tariff threats toward Beijing, hinting at renewed trade talks.
