U.K. Government's Fiscal Credibility in Focus as Bond Yields Climb
Dow Jones
Sep 24
0729 GMT - Investors in U.K. government bonds, or gilts, will pay attention to the credibility of the government's spending and revenue generating plans at the October 28 budget, Mizuho's Evelyne Gomez-Liechti says in a note. Gilt yields are close to multiyear highs, which raises the cost of borrowing and adds pressure to U.K. public finances. A sharp increase in long-dated gilt yields ahead of the budget could signal that investors are worried about U.K. fiscal sustainability, Gomez-Liechti says. Ten-year gilt yields rise 2 basis points to last trade at 5.340%, Tradeweb data show.
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