Gilt Yields

Baroness Kramer Excerpts

Tuesday 2nd September 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. I am happy to reconfirm that; our commitment to the fiscal rules is non-negotiable. The Government have a clear plan in place to put the public finances on a sustainable path and prioritise investment to support long-term growth. At the Spring Statement, the OBR forecast that borrowing would fall in every single year of the forecast, from 4.8% of GDP to 2.1% of GDP in 2029-30.

The noble Lord also said it is important that our economic policy does not stand out from our peers. One area in which we did stand out when this Government came to office was in historically low levels of investment in our economy, which constrained growth. We had the lowest levels of investment in the G7, which is something that our fiscal rules seek to rectify.

[Baroness Kramer (LD)]

My Lords, there is a global glut of sovereign debt as Governments across the globe keep borrowing, but among the G7 it is the UK that has had to raise its yields the most. To aggravate our situation, the wind-down of defined benefit pension schemes leaves us dependent on volatile domestic retail and overseas buyers. What is the Government’s immediate strategy to bring down yields and, more fundamentally, build a sustainable gilts market—and would sterling stablecoin contribute to this?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. As I have said, recent gilt yields have risen in line with global peers, mainly driven by global factors. Recent gilt market moves have been orderly; the gilt market is deep and liquid, with a good track record in responding smoothly to volatility in levels of gilt supply. Underlying demand for the UK’s debt remains strong, with a well-diversified investor base. It is most important that I stress that our commitment to the fiscal rules is non-negotiable and we have put the public finances on a sustainable path.