Yields on U.K. government bonds stayed lower on the day, while sterling was little moved, after Prime Minister Andy Burnham announced new measures at the Labour Party's annual conference.

One of the key measures announced was an adjustment to the so-called 'triple lock' on pensions, which has traditionally ensured that the state pension rises annually in line with inflation, wage growth for the year, or 2.5%--whichever is highest.

In a widely expected tweak to this system, from April 2030, the annual wage growth criterion was altered in favor of one where average earnings would be tracked. The state pension would hold its value "relative to earnings over time," Burnham said. The other thresholds of inflation and 2.5% remain unchanged.

Ten-year gilt yields traded 2.6 basis points lower on the day Tuesday after the speech to trade at 5.404%, LSEG data show. Sterling fell 0.3% against the U.S. dollar to $1.3207 and was flat at 0.8581 per euro.

Burnham's speech came ahead of the Oct. 28 budget where he has promised to stick to the fiscal rules.

Lower gilt yields suggest the market "is willing to give Burnham the benefit of the doubt" in the lead-up to the budget, Kathleen Brooks, research director at XTB, said in a note.

Burnham also promised lower household energy bills and reduced bus fares, aimed at softening inflation pressures. He pledged to build a national care service, create a public body to invest in the electricity grid and strengthen control of water companies.

"A temporary intervention on household energy costs could ease pressure on household finances while helping contain inflation expectations and limit the need for higher interest rates," Deutsche Bank economists said in a note.

U.K. Treasury Chief John Healey in a speech on Monday also reiterated that he would stick to fiscal discipline.

"The Prime Minister and I are in lockstep that we will meet the fiscal rules. That we will maintain control of Britain's finances," he said.

Tuesday's announcement boosted sentiment in the gilt market and caused U.K. government bonds to outperform their developed-market peers. However, the government will need to contend with limited fiscal headroom and has made additional spending commitments since Burnham became prime minister in July.

"With the budget one month away, higher gilt yields, rising debt-service costs and pressure on the financing requirement remain central concerns," Patrick Munnelly, partner at Tickmill Group said in a note.

Market focus will now switch to the budget, when the government is expected to announce policy measures designed to both boost growth and improve shaky public finances.

The government already announced a scheme to support first-time house buyers. The announcement made over the weekend was well received, leading housing sector stocks to rally.

"The prospect of a new Help to Buy-style scheme has lifted spirits in a sector which has struggled amid high mortgage rates and concerns about affordability, especially for first-time buyers," AJ Bell head of financial analysis Danni Hewson said in a note.