UK gilt yields are expected to fall over the remainder of the year, analysts and investors have said, a shift that would help restore the £10 billion to £12 billion of fiscal headroom lost to rising borrowing costs since February before the budget on 28 October. The forecasts come weeks after Andy Burnham’s new government took office and ahead of John Healey’s first budget as chancellor. The rise in gilt yields since February, when the US-Iran war broke out, has removed about £10 billion to £12 billion from the headroom the government holds against its fiscal rules. A 1 percentage point increase in the ten-year gilt yield adds £12 billion to £15 billion to the government’s debt interest bill. Analysts at Bank of America said the Bank would cut its annual pace of quantitative tightening from £70 billion to £50 billion from September.