1401 GMT - Sterling and 10-year U.K. government bond yields react modestly to Wednesday's U.K. budget as the fiscal spending plans will have limited implications for Bank of England policy, Capital Economics economist Paul Dales says in a note. The fiscal policy tightening of 9.7 billion pounds in 2029-30 is "not big" relative to previous plans, he says. "And with all of the tightening taking place from 2027/28 onwards, it's not going to significantly dampen economic growth over the next two years." That means it's unlikely to have much impact on BOE policy, he says. Market expectations for BOE interest rate cuts are little changed after the budget with about 43 basis points of further cuts priced in by year-end, according to LSEG. Sterling stays weaker, last down 0.5% at $1.2887. The 10-year gilt yield falls 3 basis points to 4.722% according to Tradeweb. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

March 26, 2025 10:01 ET (14:01 GMT)

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