AJ Bell investment analyst Laith Khalaf attributes the recent rise in UK bond yields to inflationary pressures and market complacency, rather than Chancellor Rachel Reeves' budget. Khalaf notes the parallel rise in US and UK bond yields since October, suggesting a broader global trend.
Donald Trump , rather than Rachel Reeves , is probably to blame for the rise in UK bond yields today, argues Laith Khalaf, head of investment analysis at AJ Bell. Khalaf says: “The bond market has taken fright from the growing sense of inflationary pressures in the air. The benchmark UK 10-year gilt has now risen to levels not seen since the financial crisis.
It’s somewhat odd that bond yields have risen to new highs so long after interest rates have peaked, which suggests markets were complacent about inflation and overly confident that the Bank of England would cut rates sharply. “Rachel Reeves appears to be one potential culprit for rising bond yields, which is probably wide of the mark. Reeves’ maiden Budget was marginally inflationary, and did increase overall government borrowing, but since the beginning of October the US and UK 10-year bond yields have tracked upwards almost hand in hand (see chart below). Those who think the current bout of bond market jitters is down to policie
BOND YIELDS INFLATION UK ECONOMY RACHEL REEVES DONALD TRUMP
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