UK Labour Government's Budget Plan: £300bn Debt Issuance Expected.

Investment banks anticipate UK debt sales to reach nearly £300 billion this year, the second-highest on record, as the new Labour government prepares for its first Budget. This significant increase in borrowing is expected to fund infrastructure and public services while addressing a £40 billion gap in public finances.

The proposed changes to borrowing rules, including a shift to a broader gauge of net debt, are causing unease in the bond market. Gilt yields have risen to their highest levels since July, reflecting investors' concerns about increased borrowing.

Analysts forecast the Treasury's net financing requirement for the year to March 2025 to rise to £298 billion from the current £278 billion. This would be the highest figure since the extraordinary borrowing during the Covid-19 pandemic.

Report by Financial Times