UK Bond Demand Breaks Records as FTSE 100 Closes at New High

The UK government’s latest debt auction drew record-breaking demand, signalling strong investor confidence in gilts despite lingering uncertainty around global markets and domestic fiscal policy. The surge in appetite for government bonds coincided with a fresh closing high for the FTSE 100, which climbed as financials, energy, and heavyweight multinationals extended recent gains.

Investors absorbed the new issuance at aggressive bid-to-cover ratios, reflecting expectations that the Bank of England may adopt a more cautious policy stance amid softening growth indicators and increased fiscal tightening. Strong demand also suggests that gilts are regaining their appeal as a defensive anchor in portfolios, particularly while volatility remains elevated in U.S. and Asian markets.

Meanwhile, the FTSE 100 benefited from sterling softness and robust performance across globally-exposed sectors. Lower currency levels helped boost the index’s export-focused companies, while stable commodity prices supported energy and mining stocks.

With the UK preparing its updated fiscal plans, traders will be watching for signals on borrowing, tax policy, and spending targets — all of which could influence gilt yields and the sustainability of the FTSE’s upward momentum. For now, both the bond market and the equity benchmark are flashing renewed confidence in the UK’s near-term economic direction.