Budget concerns hit UK bond auctions as investor demand continues to cool.

On September 25, Jin10 reported that as the November budget proposal approaches, concerns over the UK's fiscal outlook are beginning to impact demand for UK bond auctions. This week, key indicators measuring demand in the UK government's auctions of 5-year and 30-year bonds fell to their lowest levels in at least two years. On Thursday, the UK Debt Management Office (DMO) will auction a total of £2 billion in 9-year and 13-year government bonds through a bidding process, which will serve as another test of market sentiment. Investors harbor doubts about Chancellor Reeves' fiscal plans, pushing the 30-year yield to its highest level since 1998 earlier this month. "The Chancellor has subjected the market to 12 weeks of speculation, and we have yet to see concrete data. Expectations for the budget deficit seem to be continually rising," said Hank Calenti, senior fixed income strategist at SMBC Nikko Capital Markets. "Issuing bonds in this environment is understandably challenging."