UK markets were plunged into fresh volatility on Friday as speculation about the budget heightened uncertainty over the nation’s fiscal position.
First, government bond yields jumped the most since July, and the pound and FTSE 100 stock indexes slumped, after overnight reports that Chancellor of the Exchequer Rachel Reeves was dropping plans to raise income tax.
The moves pared after Bloomberg reported that improved UK forecasts led Reeves to drop the plans to hike income tax, according to people familiar with the matter.
That left the UK’s 10-year yield seven basis points higher at 4.50%, after earlier rising as ...