“As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.”
Jane Foley, senior FX strategist at Dutch bank Rabobank, said, “Although U.K. assets are reacting well to the U-turn, they are far from being out of the woods.”
Ten-year gilt yields were lower Monday morning, with the yield dropping nearly 2% at 9 a.m. The two-year was choppy.
“There will still be a lot more gilt issuance this year and, as things stand, the BOE’s extraordinary support will end on Oct. 14. Then, [quantitative tightening] is supposed to be starting on Oct. 31, though there is a lot of speculation that there is next to no chance of this happening,” Foley added.
