"The surge in yields will force Chancellor Rachel Reeves to weigh politically explosive choices in her first autumn Budget next month, says deVere Group, one of the world's largest independent financial advisory and asset management organizations. The yield on 30-year UK government debt rose to 5.68% on Tuesday, surpassing the highs reached earlier this year and climbing to levels not seen since 1998."
""The markets are making their view brutally clear," says Nigel Green, CEO of deVere Group. "The message from the bond market is the same as the one that humiliated Liz Truss: fiscal credibility cannot be faked. Reeves will have no choice but to deliver tough measures-either tax rises, spending cuts, or both-if she wants to prove that Britain's debt can fall in line with her fiscal rules.""
UK long-term government bond yields have surged to levels not seen since 1998, with the 30-year gilt reaching 5.68%, increasing the cost of financing debt. Higher yields tighten the Treasury's limited fiscal headroom and will compel Chancellor Rachel Reeves to consider politically difficult choices in the autumn Budget, including tax rises, spending cuts, or both. The move occurs amid global bond market turmoil as investors dump long-dated debt and demand higher returns due to sticky inflation and mounting sovereign borrowing. Past UK policy shocks have left investors particularly sensitive to any signs of weakened fiscal credibility.
Read at London Business News | Londonlovesbusiness.com
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