Markets are now treating UK bonds like Greek and Italian debt
CNNLondon CNN Business — The pound may have paused its headlong crash toward parity with the US dollar, but the damage to the UK economy sparked by Prime Minister Liz Truss’ huge tax-cutting gamble is still rippling through financial markets. “This is a situation where government borrowing costs — and therefore all our borrowing costs — are incredibly vulnerable,” economist Mohamed El-Erian, an adviser to Allianz, told the BBC on Tuesday. Kwasi Kwarteng, the UK finance minister, has promised to release more details about the government’s approach to ensuring debt sustainability, while also indicating additional tax cuts could be on the horizon. At a meeting with anxious investors Tuesday, he reiterated the British government’s “commitment to fiscal sustainability.” “We’re still in a phase where markets in general are trying to establish new equilibrium values,” Walker said. “It’s going to increase their interest costs significantly.” The Resolution Foundation, a think tank that’s been critical of the government’s plans, estimates that bond market movements will add about £14 billion in borrowing costs by the year 2026 to 2027.
History of this topic
UK debt woe as borrowing costs surge again amid fresh market jitters
Daily Mail
Government borrowing costs rise further after Budget
The Independent
Rishi Sunak embarks on record £206bn debt binge
The Telegraph
UK bond market rallies at sharpest pace in Europe amid interest rate hopes
The Telegraph
Britain’s property market faces a reckoning – the house price plunge is only beginning
The Telegraph
The UK just stepped back from the brink. But there’s more trouble ahead
CNN
Government bonds and pound rally amid pressure for mini-budget U-turn
The Independent
Bank of England expands push to stabilize financial markets
Associated Press
The U.K. is staring into an economic abyss
The Hindu
UK central bank intervenes in market to halt economic crisis
Associated Press
Bank of England will buy UK bonds at ‘whatever scale’ necessary to halt crash
CNN
Bank of England forced to intervene in markets over ‘material risk’ to UK economy
The Telegraph
Bank of England urged to call emergency rates meeting next week to rescue pound
The Telegraph
Bank of England poised to take bond-buying plan above $1 trillion
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