UK Budget: Before & After

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Vidal Mehra

Chief Product Officer

Helena Roughton

Product Manager - Regulatory Focus

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Wednesday 28th October was the first budget for the (new) UK Chancellor John Healey. In this edition we take a look at the movement on UK Gilts and SONIA Overnight Index Swaps in the run-up and shortly after the budget announcement.

Chart 1: UK Gilt & SONIA OIS Data Collected via Propellant Digital UK Budget Week (up to and including 28/10/2026)

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Key takeaways

Gilts did not move significantly on the budget day itself

Long end gilts have moved more than shorter and ultra-long gilts (past 30 years)
The gilt curve has flattened slightly (meaning short end yields have stayed the same or risen, whereas longer dated bond yields have dropped)
The 10yr remains the most active space (this is common for sovereign issuers)
Swap spreads (the difference between the swap rate and gilt yield) have been fairly consistent

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Vidal Whilst long end Gilt yields remain fairly volatile, front end yields and swap rates have been fairly consistent in comparison.

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Helena Volatility around the time of the budget itself was fairly limited, suggesting the market had anticipated most announcements.

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About the Authors

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Vidal Mehra - Vidal is Chief Product Officer for Propellant Digital and the lead author for Propellant Insights.

He has been working with financial institutions for over 20 years across multiple disciplines including front office and consulting roles.

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Helena Roughton - Helena recently joined the team as a Product Manager, bringing extensive MiFID policy experience having previously worked at AFME.

She also brings product remediation and data analysis experience from the Bank of New Zealand.

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Key takeaways

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