Gilt yields have returned to levels last seen before September’s controversial mini-Budget.
The 30-year gilt yield fell to 3.67%, as investors welcomed Rishi Sunak’s confirmation as the UK’s new prime minister on Tuesday.
The move means long-term bonds, which were at the centre of a chaotic sell-off last month that prompted emergency intervention from the Bank of England, have now recovered the losses triggered by the package of tax cuts announced by former prime minister Liz Truss.
Two-year gilts have also recovered their post-Budget losses, with yields falling to 3.32% on Tuesday. Ten-year gilt yields also fell sharply, aided by a global bond rally, but they remain slightly higher – at 3.64% – than their level before the Budget of 3.5%.
The pound also climbed on Tuesday, rising by 1.8% against the dollar to $1.1479.
