"Steady Mr. Burnham" temporarily reassures the British bond market, but long-term bonds are still unattractive.

British bond investors are gradually gaining confidence in Andy Burnham's commitment to discipline in borrowing and spending, but this is not enough to make them bet on long-term UK bonds. Investors from Jupiter Asset Management, Neuberger Berman, and Royal London say they will continue to avoid longer-term UK bonds until there is more clarity on the next Chancellor of the Exchequer and the first budget. However, they currently have a positive outlook on short-term government bonds and find their yields attractive. Piers Hillier, Chief Investment Officer at Jupiter Asset Management, said, "The long end is completely out of favour." One of the issues the market faces is that pension funds are no longer buying long-term bonds in large quantities as they did in the past. As the most likely successor to UK Prime Minister Keir Starmer, Burnham is gradually testing his economic policy vision in public. He mentioned in an interview on LBC Radio on Thursday that he would maintain the Labour Party's election manifesto, while also leaving room for potential adjustments in certain tax measures. The drop in oil prices has also boosted market confidence. The money market is now less certain that the Bank of England will need to raise interest rates this year, with only an 80% probability of a 25 basis point increase before the end of the year. This is a contrast to last month when traders were still betting on at least one rate hike. Ben Nicholl, Senior Fund Manager at Royal London Asset Management, is one of the investors buying short-term government bonds, as he is betting that market expectations will soon shift towards a rate cut.