Pound steady and gilt yields drop as chancellor ‘navigates first budget without spooking gilt markets’, experts say John Healey said on Wednesday that higher inflation and interest rates had hit the government’s finances, ratcheting up the government’s interest bill by £14bn this year alone, but promised to stick to Labour’s fiscal rules. The Office for Budget Responsibility (OBR) said the chancellor would meet the most important rule – to balance day-to-day spending with tax revenues – with a diminished headroom of £15bn by the target date of 2029-30, against the £24bn his predecessor Rachel Reeves had built up in the spring. A ’continuity budget’ with fiscal headroom upside potential pushes the pound ’s perceived fiscal risks to the background. The new chancellor has successfully navigated his first budget without spooking gilt markets. Albeit, that is partially thanks to helpful chang