(Bloomberg) — Chancellor of the Exchequer Rachel Reeves’s deputy said the gilt market is functioning as normal and underlying demand for UK debt is strong, as pressure grows on the British government amid a rise in borrowing costs and wider market selloff.
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“UK gilt markets continue to function in an orderly way,” Chief Secretary to the Treasury Darren Jones told the House of Commons on Thursday, responding to a so-called urgent question posed by the opposition Conservative Party. “It is normal for the price and yields of gilts to vary when there are wider movements in financial markets.”
Jones was speaking after the pound dropped to its lowest in more than a year, stocks also fell and gilts extended losses for a fourth day on concerns that Keir Starmer’s Labour government will struggle to keep the deficit in check as borrowing costs surge. The minister also said there’s no need for an emergency intervention to shore up the markets.
“It is a long-standing convention that the government does not comment on specific financial market movements,” Jones said. “I will not be breaking that convention today.
Jones also said the UK continues to see strong demand for its debt, referencing yesterday’s over-subscribed auction of new UK 5-year bonds.
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