UK government bonds popped during Osborne's Budget

Thumbs upGetty ImagesBond investors seems to like the Budget announcement.

Anyone who keeps an eye on UK bonds will have noticed an uptick just after Chancellor George Osborne outlined the government’s budget for 2016.

It suggested investors were happy with what they heard.

Despite Osborne’s cut of projected UK growth of 2% from 2.4% in the last Autumn Statement, Osborne said that UK would still grow faster than any other major Western economy.

A million more jobs were also predicted to be created by 2020, while inflation was expected to rise to 1.7% next year.

This chart shows the rise in purchases of UK Gilts from when the Osborne began his Budget speech and to just over 90 minutes later:

The chart also suggests that bond investors already expected good news if the beginning of the day was anything to go by. Much of the Budget is previewed so the bulk of the announcement on the day isn’t a surprise.

Investors will have been heartened by Osborne’s forecast that the UK deficit as share of GDP is expected to fall to 2.9% in 2016-17, while government spending as a share of GDP was expected to fall 36.9% by 2020.

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