Follow Rachel Reeves’ budget as it happens, and all the details of the mistakenly released OBR forecasts, with Graeme Wearden and Andrew Sparrow on our politics live blog:In the Canary Wharf offices of Saxo UK there is a race to understand the implications of the leaked forecasts - mixed with laughter at the hapless Office for Budget Responsibility,As well as sterling, there was some movement on UK bond markets after the leak,The yield on the benchmark 10-year gilt - a measure of the cost of government borrowing - dropped quickly from 4,5% to about 4,42%.

Yet a few minutes later it was back up above 4,52%,Will Marsters, a sales trader at Saxo UK, said:“The initial reaction was to come off yields quite a bit, but once the market digested it, it came back,”Traders are trying to work out if chancellor Rachel Reeves’s plans seem credible - which would reduce the chance of higher bond yields,Marsters said:“The tempered growth didn’t seem too optimistic, which eroded some of the risk premium.

But now everyone is just trying to digest.”However, Neil Wilson, investor strategist, said there was an assumption of tighter spending later in the parliament.“You’re saying we’re going to buy fiscal restraint by the end of the parliament - ‘Don’t worry about welfare - we’ll sort it out.Follow Rachel Reeves’ budget as it happens, and all the details of the mistakenly released OBR forecasts, with Graeme Wearden and Andrew Sparrow on our politics live blog:Gambling companies are to face higher taxes, the OBR confirms.Its accidentally released economic and fiscal outlook says:Several changes to gambling duties have been announced in the Budget which overall are estimated to raise £1.

1 billion by 2029-30.From April 2026 there will be an increase in remote gaming duty from 21 to 40 per cent and abolition of bingo duty from its current 10 per cent rate.This has hit the share price of betting companies.Shares in Entain, whose brands include Ladbrokes, Coral and BetMGM, have fallen by 4.44%Evoke, the firm behind William Hill, 888, and Mr Green, are down 14.

5%.The accidentally released OBR report shows that growth will be weaker than previously forecast.Real GDP is forecast to grow by 1.5% on average over the forecast, 0.3 percentage points slower than projected in March, “due to lower underlying productivity growth”.

The OBR says it has (as expected) lowered its estimate:We have reduced our central forecast for the underlying rate of productivity growth in the medium term to 1.0 per cent, 0.3 percentage points slower than in our March forecast.The OBR’s new report has now vanished from its website, replaced with a 404 Not Found error.Presumably it will be back at 1.

30pm….At the London offices of Saxo UK on Wednesday morning, observers would have been forgiven for forgetting that Rachel Reeves was preparing to announce her second budget - until the apparent accidental early release of the government’s official economic analysis moved the markets.The value of the pound immediately jumped after the forecasts showed tax rises of £26.1bn by 2029-30, and growth of 1.5% over the next five years.

Sterling rose briefly from $1.3160 to $1.32, as investors scrambled to digest the leak.Sitting on the 26th floor of a tower in London’s Canary Wharf financial district, Neil Wilson, investor strategist at Saxo UK, said:It’s not a ginormous move, but in a minute it’s a noticeable spike.It has retraced a bit now.

[the pound’s now slipped back to $1,313]There was general excitement as the Office for Budget Responsibility, the government’s forecaster, accidentally published its full analysis two hours early,“Boom! There’s your 200-pager,” said Will Marsters, a sales trader, as the full report was published,Astonishingly, the OBR’s latest Economic and fiscal outlook has indeed been published early on the fiscal watchdog’s site,You can see it here.

The report confirms that the two-child limit is being lifted, at a cost of £3bn, which will the OBR says will increases benefits for 560,000 families by an average of £5,310.There are also personal tax rises with a combined yield of £15 billion in 2029-30.The OBR says:These include: freezing tax thresholds from 2028-29 onwards, which raises £8.0 billion in 2029-30 and contributes to around 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate taxpayers by 2029-30 than in the March forecast; charging National Insurance on salary-sacrificed pension contributions, which raises £4.7 billion; and increasing tax rates on dividends, property and savings income by 2 percentage points, raising £2.

1 billion.Newsflash: UK borrowing costs are falling, after a flurry of news flashes attributed to the Office for Budget Responsibility.Reuters are reporting that the UK’s headroom to meet the chancellor’s stability rule has more than doubled!They are snapping that the current budget surplus margin has risen to £21.7bn in the OBR’s new forecasts, up from the £9.9bn forecast in March.

[This is the target for the current budget to be in balance in 2029-30]Bond investors had hoped to see an increase in the headroom – and they are piling into UK government bonds, driving down the cost of borrowing,The yield (or interest rate) on 10-year gilts has fallen by 5 basis points (0,05 of a percentage point) to 4,44%,This is an unusual development – the OBR are meant to release their forecasts when the chancellor sits down, not before she’s even stood up.

Reuters are also snapping that the chancellor’s tax rises will bring in £26bn more – and (as feared) the budget regulator has cut its productivity forecast,UK OBR ECONOMIC AND FISCAL OUTLOOK: BUDGET TAX RISES RAISE 26,1 BLN STG BY 2029-30UK OBR: CENTRAL GOVERNMENT NET CASH REQUIREMENT EX NETWORK RAIL 149,2 BLN STG 2025-26UK OBR: CUTS MEDIUM-TERM PRODUCTIVITY GROWTH FORECAST TO 1,0 PCT FROM 1.

3 PCTUK OBR: FREEZING PERSONAL TAX THRESHOLDS RAISES 8.0 BLN STG IN 2029-30UK OBR: NICS ON SALARY-SACRIFICE PENSIONS RAISES 4.7 BLN STG IN 2029-30The London stock market has opened a little higher today, ahead of the budget.But really, that’s part of a wider global rally rather than enthusiasm about what will be announced at 12.30pm.

The FTSE 100 index of blue-chip shares is up 27 points, or 0.3%, to 9,637 points, a little closer to the record high (9,930) set earlier this month.Mining companies are among the risers, as investors grow more confident that America’s central bank will vote for a growth-boosting cut in US interest rates next month.The more domestically-focused FTSE 250 share index is up 0.37%.

Joshua Mahony, chief market analyst at Scope Markets, says:The FTSE 100 has enjoyed tentative gains at the open, pushing higher in anticipation of a UK budget that finally draws the line under a period of great uncertainty and concern for businesses and workers alike.The chancellor has already drip fed some of the giveaways, with the minimum wage hiked by 4.1%.It isn’t a great start for those hoping this budget would be less inflationary than her last.After all, the annual CPI figure remains distorted by April’s 1.

2% surge as the energy price cap hike coincided with policy measures of higher minimum wage and NI contributions for businesses.Nonetheless, with Reeves promising to bring down the cost of living, there is a hope that this time around we will see some relief to household expenses through reduced green taxes on electricity.From a wider perspective, the recent decline in UK GDP (-0.1%), Rightmove house prices (-1.8%), and retail sales (-1.

1%) signal an economy that has withered away under the cloud of uncertainty.There is a hope that today will mark the beginning of a new phase where that uncertainty gives way to a more expansive phase where lower yields and a BoE rate cut overshadow concerns around the impact of today’s tax hikes.UK borrowing costs have crept slightly higher this morning, reversing some of yesterday’s fall.The yield (or rate of return) on a 10-year UK bond has risen by 0.011 percentage points today (or 1.

1 basis points), to around 4.5%.That’s a seriously marginal move – especially as 10-year yields fell by 4 basis points yesterday.A rise in yields indicates that bond prices have fallen, and vice versa.ING’s rates strategists, Michiel Tukker and Benjamin Schroeder, caution that UK debt (known as gilts) are reliant on foreign investors’ trust to keep yields under control.

They write:Gilt markets have been quite volatile in the run-up to the budget and more price swings are possible as the details emerge,Our baseline is one where the Chancellor does deliver the required budget adjustment to meet the fiscal rules and engineer a material fall in the FY2026 deficit, but a sharp rise in yields is possible if either the fiscal consolidation isn’t perceived as sufficient, or if political pressure builds on Chancellor Reeves in the aftermath,Patrick Farrell, chief investment officer at wealth managers Charles Stanley, says the chancellor needs to strike a tricky balance today:“The Chancellor needs to deliver a Goldilocks Budget today – one with just the right balance between supporting growth, preserving fiscal credibility, and not overburdening households or businesses,It’s a tough ask and bond markets could decide Rachel Reeves has served up a dose of cold porridge for taxpayers while not doing enough to tackle a yawning fiscal black hole,If the fiscal measures are considered too tight, as well as choking off growth, we could see political instability, which would be hard for bond markets to stomach.

However, anything too expansionary would risk inflation and unsustainable borrowing.”Farmers have brought their tractors to London today for a budget protest about inheritance tax changes, despite a police ban on the vehicles (see earlier post).PA Media report that a number of tractors were seen driving through Westminster early on Wednesday, with police stopping around 20 of them in the vicinity.This included a farmer dressed as Father Christmas, his tractor carrying a large spruce tree and bearing a sign that read:“Farmer Christmas – the naughty list: Keir Starmer, Rachel Reeves, David Lammy, Diane Abbott, Angela Rayner & the BBC”.PA Media adds:Farmers have parked more than a dozen tractors, brought to Westminster in defiance of Met police restrictions prohibiting agricultural machinery from the area, around Trafalgar Square.

They repeatedly sounded the tractor horns while police stood watching, with rush-hour traffic brought to a standstill.David Gunn, an arable farmer and agricultural contractor from near Sevenoaks in Kent, said he was protesting on Budget day for a number of reasons, including the Government move to put inheritance tax on larger farm businesses.He said: “Inheritance tax is one reason, it’s going to cripple the farmers, the small family farmers.“There’s all the other taxes they’ve been putting on us, and the prices we get for our produce and what it costs in the shop, we don’t make any money.“Then there’s food security, farmers are going out of business.

”He said his message to Government was “sort the pledge out”,“You said in the manifesto you would look after the farmers, which you totally haven’t, you’ve ruined the countryside,” he said,Reto Cueni, chief economist at Syz Group, reckons the government will want to “deliver the right message” to the financial markets with today’s budget,That, Cueni says, means showing a fiscal consolidation of close to £30bn, likely extending the headroom against the fiscal rules closer to £15bn,To achieve such an additional fiscal consolidation, the UK government will likely have to increase taxes – but will try to do so in the “non-inflationary” tax areas, such as tax threshold freezes, or smaller changes to pension taxes, higher council taxes or increasing the gambling taxes and reducing capital gain tax exemptions, while also looking to avoid inflationary instruments, such as duties or tax changes that would substantially raise costs for businesses.

The key for the government is to show that over the next 2 years the budget deficit will be reduced and the UK’s debt burden will finally move down, Cueni says, adding:Therefore, the Debt to GDP ratio in the OBR’s forecast should be lower in the new release,By reducing the fiscal deficit over the next two years, the government can regain fiscal credibility and assure investors that the UK’s government is keeping control of the debt situation,This would relax tensions in the gilts market and let yields grind lower,That, in turn, would support domestic oriented stocks in the UK’s equity market, namely homebuilders, utilities, or FTSE 250 in general,Otherwise, with a disappointing new budget, gilt yields would likely increase again, pushing domestic oriented stocks down and supporting internationally oriented stocks and (domestic) bank and financial stocks