"If Rachel Reeves mishandles the Budget, gilt markets will deliver a damning verdict in minutes, triggering a chain-reaction of events, warns the CEO of one of the world's largest independent financial advisory organizations. The warning from Nigel Green of deVere Group comes after last week's bonds sell-off proved how quickly confidence evaporates when fiscal intentions look uncertain, with 10-year yields surging in their biggest single-day move since July and forcing investors to reprice UK risk across the board."
"As we saw last week, gilt markets are paying closer-than-normal attention. As such, businesses, households, savers and global investors are facing a moment where the consequences of a misstep could feed through the system fast. Gilt yields act as the reference price for almost every major asset and loan class in the country. The latest volatility has already tightened corporate credit conditions and pushed mortgage costs upward, illustrating how sensitive the economy is to any hint that the government might struggle to impose discipline."
A mishandled Budget would prompt gilt markets to deliver a rapid, damning verdict within minutes, potentially triggering a chain reaction across financial markets and the real economy. Recent bond selling caused 10-year yields to surge in the largest single-day move since July, forcing investors to reprice UK risk and tightening corporate credit conditions. Gilt yields function as the reference price for most asset and loan classes, so volatility has already pushed mortgage costs higher and increased refinancing costs for businesses. Thinner liquidity and heightened scrutiny mean any fiscal misstep could quickly raise borrowing costs, slow hiring, and amplify supply-chain and household financial stress.
Read at London Business News | Londonlovesbusiness.com
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