UK government debt sales are expected to fall next year for the first time in four years, easing pressure on the gilt market as Chancellor Rachel Reeves tightens control over public borrowing. Major investment banks forecast around £247bn of gilt issuance in the fiscal year to March 2027, down from £304bn this year. The drop reflects lower refinancing needs for maturing debt and reduced borrowing requirements following tax rises announced in the November Budget. Although issuance remains high by historical standards, investor sentiment has improved, particularly as countries such as Germany and Japan increase their own debt sales. Borrowing costs, which peaked above 4.9 per cent last year, have eased to just over 4.3 per cent. Public finances have also strengthened. Borrowing between April and January totalled £112.1bn, below both last year’s level and the £120.4bn forecast by the Office for Budget Responsibility. A record £30bn surplus in January further boosted the government’s position, increasing its fiscal headroom. Lower gilt yields are expected to provide a modest additional cushion against the government’s fiscal targets. However, analysts warn that political pressures on Prime Minister Keir Starmer and the Labour Party could complicate efforts to keep borrowing on a tighter path.