UK government bond markets rallied as Keir Starmer expressed strong support for Rachel Reeves, who is seen as a market-friendly chancellor. The yield on British government bonds dropped approximately 0.1 percentage points, trading close to 4.5%. The pound strengthened against other currencies, and the service sector indicated significant growth. Despite this positivity, investors remain concerned about addressing a substantial shortfall in public finances following recent cuts to disability benefits and winter fuel payments. Reeves has vowed to adhere to her fiscal rules amid ongoing challenges in the economic outlook.
The yield on British government bonds, known as gilts, fell by about 0.1 percentage points on Thursday morning to trade close to 4.5%, reversing a sharp rise on Wednesday sparked by feverish speculation over Reeves's future.
Neil Wilson, a UK investor strategist at Saxo Bank, noted that replacing Reeves would indicate a higher chance of changing fiscal rules, implying more debt and instability.
Despite Starmer's initial failure to fully back Reeves at prime minister's questions, he publicly expressed support for her in a BBC interview and denied suggestions she was upset.
Reeves has repeatedly promised to stick to her iron-clad fiscal rules, yet investor concerns remain about addressing the multibillion-pound hole in Britain’s public finances.
Collection
[
|
...
]