Burnham beware, the bond markets will demand proper answers in the budget | Nils Pratley
Fair to say the current sell-off is international, but the PM has said little yet to make investors rethink the UK’s status It’s too soon to say the bond markets have turned on Andy Burnham. Tuesday’s spike in gilt yields, taking the UK’s 30-year borrowing costs to their highest level since 1998 , was part of an international sell-off of government debt . The main contributors are well-known. The…
The recent sell-off in the bond markets has raised concerns about the UK's financial stability, with investors demanding proper answers from Prime Minister. While it is too early to conclude that the bond markets have turned against Andy Burnham, the spike in gilt yields on Tuesday marked the highest level for the UK's 30-year borrowing costs since 1998.
The main factors contributing to this global sell-off include the Iran war, which has increased energy costs and disrupted the expectation of falling global inflation and interest rates. Additionally, the Japanese yen's sharp decline has undermined another assumed source of financial stability. The US Treasury Secretary, Scott Bessent, has failed to reassure investors with his attempts to lower US yields.
Moreover, the early stages of the AI revolution are seen as a risky endeavor, with governments issuing vast amounts of debt before long-term returns on capital can be accurately determined. These factors have led to increased scrutiny of the UK's financial standing, prompting the bond markets to demand more transparency and accountability from the government.
Written by urgent.news from Guardian Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
