3 weeks ago
9
Business|In Global Market Rout, Britain Is the ‘Weakest Link’
https://www.nytimes.com/2025/01/14/business/bonds-gilt-yield-britain-economy.html
You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.
Investors are demanding sharply higher yields on government bonds, threatening to upend the Labour Party’s plans to reinvigorate a stagnant British economy.
Jan. 14, 2025, 6:32 a.m. ET
Governments around the world are uncomfortably watching their borrowing costs rise, following the lead of the U.S. Treasury market. But even in a global rout in bonds, Britain stands out.
British government bonds, known as gilts, are suffering a particularly harsh sell-off, as investors recoil from the country’s low economic growth, stubborn inflation and high debt levels. The yield on 10-year gilts, the benchmark rate, reached 4.9 percent on Tuesday, the highest since 2008, while yields on 30-year bonds were the highest since 1998.
The surge in borrowing costs puts the British government’s plan to revive economic growth, by allocating more money for public services and greater investment, at risk less than three months after it was announced.
“At a time when yields are rising everywhere, global investors are looking at the U.K. like the weakest link in the chain,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management.
And it’s not just bonds. The British pound is at its lowest level against the dollar in more than a year, performing worse than other major currencies in the past month, and stocks have fallen in London.
Yield on 10-year British government bonds
