Gilts trade very marginally firmer after the London open, with little by way of significant catalysts to jolt some life into the market, particularly with this week’s economic calendar devoid of any top-tier UK releases.
Nevertheless, in keeping with the broader global trend of a hawkish repricing of the monetary policy outlook, risks do appear to continue to tilt to the downside, at least at the front-end of the curve, likely proving bad news for UK homeowners with mortgage rates likely to continue to rise as a result.
The market’s next significant catalyst comes in a week’s time, in the form of the Budget, where focus will fall primarily on the degree of fiscal loosening, via tax cuts, that Chancellor Jeremy Hunt delivers, though recent indications are that fiscal headroom will be lower, and tax cuts to a much lesser degree, than had been expected a month or so ago.
