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UK Chancellor’s mettle tested by gilt sell-off
- This week’s move in UK gilts have garnered much media attention, and even spurred a parliamentary statement by the Chief Secretary to the Treasury, Darren Jones, attempting to quell fears of a deterioration in UK debt sustainability or a shift in expected fiscal policy.
- UK gilts have broadly tracked global bond market moves in recent months, with the 10-year yield up over 50bps over the past month alone to 4.85%, a similar rise to the move in the 10-year US Treasury.
- This move may indicate some lingering concerns around the UK’s growth prospects and fiscal sustainability post the Autumn Budget, alongside perhaps “vigilantism” by some investors in the current global environment.
- Turning to the week ahead, a busy UK schedule will shed some light on the economy and may influence gilts and sterling.
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