UK gilt trading volumes fall to lowest since September 23 budget - MarketAxess

(Reuters) - Trading volumes for UK government bonds fell to the lowest on Monday since a budget announced by former Prime Minister Liz Truss's government that wreaked havoc in financial markets, MarketAxess data showed on Tuesday.

In a potential sign that investors have drawn some comfort from the selection of Rishi Sunak as the new prime minister, gilt trading volumes fell to 26.78 billion pounds ($30.72 billion) on Monday, according to MarketAxess, the lowest since Sept. 20, just days before Truss's package of unfunded tax cuts shook markets.

By Sept. 28, volumes had more than trebled to above 68 billion pounds, according to the data.

Average bid-ask spreads, a key gague of market liquidity measuring the difference between buyer and seller prices, remained elevated at 22 pence on Monday, the data showed, well above pre-budget levels.

($1 = 0.8718 pounds)

(Reporting by Yoruk Bahceli; Editing by Amanda Cooper)