Government bond dealers see the UK raising roughly £3 billion more than planned to cover pricier debt and public spending. The median of 11 estimates pegs issuance at £249.2 billion for the year through March, versus the DMO's April remit of £246.2 billion. A related Bloomberg line put the tally at £249.6 billion, signaling a similar, modest uplift.
Forecasts ran from £243 billion to £256.2 billion, a narrow spread that points to a small top up as borrowing costs rise.
Ten dealers weighed in on the maturity split and expect more short-dated funding. Treasury bill issuance is seen around £11.1 billion, up from the £5 billion projected in April.
On gilts, those responses imply about 42.7% of issuance in short maturities and 35.3% in medium tenors, compared with April guidance of 39% and 31%. Long-dated supply is expected to ease to 6.5%, with index-linked around 9.9% and 5.6% unallocated. There has been one long-bond sale so far this year: £4.25 billion of 30-year gilts on Sept. 8.
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Dealers' median view has fiscal headroom around £15.2 billion, roughly a one-third decline, with nine estimates spanning £12.5 billion to £19 billion. After the war in Iran started, benchmark 10-year yields moved from 4.23% to 5.4%, which pushes the government nearer to its rule that day-to-day spending should be covered by taxes by the end of the Parliament. Estimates also build in a partial offset on the revenue side, for instance by lifting UK bank levies.
Ministers are being pushed to protect households from surging energy costs and to boost defense spending, while steeper borrowing costs at the same time restrict their options. The budget on Oct. 28 will include an updated DMO remit and will be the first under Burnham and Chancellor John Healey. BNP Paribas strategists including Katherine Yoon expect the budget to stick to the rules and avoid jolting "an already fragile gilt market." For scale, prior in-year uplifts were larger: £19.2 billion in October 2024 and £4.6 billion in November 2025.
Bank of America strategists Agne Stengeryte and Mark Capleton expect "more meaningful adjustments to the maturity mix" to better align supply with demand. Separately, despite the additional near-term borrowing, overall gilt issuance is anticipated to decline from the £304 billion level in the 2025-26 fiscal year.
The UK's average maturity remains the longest in the G7 at 11 years, though the DMO has been trimming it. The Bank of England has also stopped selling gilts maturing after 2049 under quantitative tightening, reducing long-end supply. The bottom line: a tilt to shorter issuance and less on the long end can reshape the curve, affecting duration risk and relative value across maturities as you position ahead of the budget and remit.
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