Interviews given by Chancellor Rachel Reeves and her number two Darren Jones speaking of a desire to soothe any tremors may have worked, though officially the government says it doesn't comment on market movements.
UK markets stabilised on Friday, offering some reassurance to Rachel Reeves as investors, policy makers and business continued to absorb the scale and implications of her first budget. Thursday saw an unusually large increase in the cost of UK government borrowing in response to the massive package of tax rises and increased borrowing. Yields on the benchmark 10-year UK gilts - effectively the interest rate the government pays to borrow money - rose to their highest level this year, by 0.
Bond prices both inform and are informed by base rates, and if markets think the Bank is going to leave them higher for longer, that is reflected. Officially the government does not comment on market movements, but an unexpected interview given by Reeves to financial specialists Bloomberg on Thursday afternoon, and the appearance of her number two Darren Jones on Friday's morning round, spoke of a desire to soothe any tremors. It may have worked.
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