Goldman Sachs: The UK fiscal plan under the next leader is crucial for the UK bond market.

Goldman Sachs analysts stated in a report that the UK government bond market may still be sensitive to the details of the fiscal plans under the leadership of frontrunner for UK prime minister, Andy Burnham. "It is not yet clear how his plans differ from current government policy, and how these plans will be funded," they said. They noted that Andy Burnham has promised to adhere to existing fiscal rules, although his plans may require additional spending. They also mentioned that the existing huge spending pressures will make it difficult to implement compensatory spending cuts in other areas, and increasing revenue through raising taxes also appears challenging. According to Tradeweb data, the 10-year UK government bond yield has risen by nearly 3 basis points, to a current level of 4.795%.