St James's Place says UK budget leaves gilt market largely unmoved
TLT•St James's Place said the UK's 2026 Autumn Budget left gilt markets barely moved, with £15 billion in fiscal headroom for 2029-30 broadly matching expectations. The Office for Budget Responsibility cut its 2027 UK growth forecast to 1% from 1.6%.
1. Budget market reaction
St James's Place described the UK's 2026 Autumn Budget as a broadly neutral fiscal package, with no major surprises or immediate implications for the Bank of England. Gilt markets barely reacted to £15 billion in fiscal headroom for 2029-30, which broadly matched expectations despite elevated geopolitical risks.
2. Inflation and growth outlook
The company said high inflation and near-term fiscal support are likely to support higher interest rates in coming months despite weaker growth expectations. The Office for Budget Responsibility cut its 2027 UK growth forecast to 1% from 1.6%.
