Category Archives: Bonds

Former Bank of England deputy warns Rachel Reeves against kneejerk cuts

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Charlie Bean says OBR forecasts are ‘flaky’ and cautions against trying to hit targets five years away

The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.

Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) – prompting a backlash from within her own party.

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European markets soar as Germany moves to lift ‘debt brake’ and raise defence spending

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Berlin’s ‘big bazooka’ proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costs

European financial markets have rallied sharply and German borrowing costs have soared after the country’s prospective leaders announced a historic deal to loosen its “debt brake” rule to boost spending on defence.

The yield – in effect the interest rate – on 30-year German government bonds rose by about 25 basis points to 3.08% in its biggest daily increase since October 1998.

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Unambiguously bleak Bank of England forecasts pave way for spending cuts

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Weak jobs market and above-target inflation will dent Reeves’s growth plans and may wipe out fiscal headroom

With the public finances tight and Rachel Reeves having pledged to balance the books, interest rate cuts are one of the few levers that could boost the UK’s economic growth in the short term, and the chancellor will be glad of the Bank of England’s quarter-point reduction on Thursday – and the clear signal that it is now in cutting mode.

Seven of the monetary policy committee’s (MPC) nine members backed the quarter-point drop, taking the Bank’s policy rate to 4.5%, while two wanted to be more “activist”, proposing a half-point cut. The Bank of England’s governor, Andrew Bailey, said the MPC would be “taking a gradual and careful approach to reducing rates further”.

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AI-linked stocks make modest gains after DeepSeek rout; Boeing posts its second-biggest annual loss on record – business live

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Donald Trump says China’s DeepSeek is a ‘wake-up call’ for American AI firms

Donald Trump has suggested that Microsoft is in talks to acquire TikTok and that he would like to see a bidding war over the app.

When asked if Microsoft was in talks to buy the app, the US president said “I would say yes”, adding “A lot of interest in TikTok. There’s great interest in TikTok.”

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UK borrowing jumps unexpectedly, adding to pressure on Rachel Reeves

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Increase to £17.8bn is well above City forecasts and is highest December figure for four years

UK government borrowing jumped unexpectedly to £17.8bn last month, piling pressure on Rachel Reeves to plan budget cuts before a spending review in the summer.

The figure was about a quarter higher than the City had forecast and was up by £10.1bn more than in the same month a year earlier, making it the highest December borrowing for four years.

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Bitcoin hits new record high, dollar dips ahead of Trump inauguration – business live

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Bitcoin rises by 4% past $109,000, reversing earlier losses; Donald Trump meme coin price tanks after wife Melania also launches token

The UK chancellor, Rachel Reeves, will travel to the World Economic Forum’s annual meeting in Davos this week in the hope of convincing some of the world’s largest companies to invest, with allies saying she will use spending cuts rather than further tax increases to meet her own fiscal rules.

At the same time, the Treasury is considering a push to cut the benefits bill, in a move that is causing nervousness among Labour MPs.

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Pound falls to 14-month low as bond sell-off piles pressure on Rachel Reeves

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UK borrowing costs rise again, with analyst warning ‘things are also getting rather ugly’

The pound has fallen to a 14-month low against the US dollar as the sell-off in the bond market fuelled investors’ anxiety over UK assets and piled further pressure on the chancellor, Rachel Reeves.

As the bond sell-off gathered steam, sterling lost a cent against the US dollar, extending recent losses, falling to about $1.226.

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Why has France’s austerity budget caused a political storm?

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Country is at risk of fresh turmoil with its government on the brink amid soaring sovereign borrowing costs

France is at risk of being plunged into fresh political turmoil as its minority government teeters on the brink of collapse amid opposition anger over a planned austerity budget.

Reflecting growing unease in financial markets, French sovereign borrowing costs have risen sharply, reaching the highest premium over German bonds since the height of the eurozone debt crisis in 2012.

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French sovereign borrowing costs rise to highest premium in 12 years

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Government faces risk of collapse over planned austerity budget

French sovereign borrowing costs have soared to the highest premium since the eurozone debt crisis amid political turmoil as the government faces the risk of collapse over a planned austerity budget.

The gap between French 10-year government bond yields and their German equivalent ballooned to as much as 90 basis points on Wednesday, the widest level in 12 years, while shares listed on the Paris stock exchange also tumbled.

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Global stock markets fall and bonds jump as fears grow over Ukraine war

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Investors dash to safe-haven currencies after Putin updates nuclear doctrine and Ukraine fires missiles into Russia

Global stock markets fell and bond prices have jumped after reports that Ukraine had fired a US-made long-range missile into Russia for the first time and Vladimir Putin approved changes to Moscow’s nuclear doctrine.

Investors dashed into safe-haven currencies such as the US dollar, the Japanese yen and the Swiss franc on Tuesday, after the RBC-Ukraine news outlet reported that Kyiv had carried out its first strike on Russian territory using western-supplied missiles.

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Will Rachel Reeves’s rules on debt and spending survive the budget?

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The chancellor desperately needs more money to finance growth and public spending so expect a bit of tweaking to supposedly strict constraints

Change*. If Labour’s one-word campaign slogan had an asterisk, it would have directed voters to Rachel Reeves’s budget.

Later this month the chancellor will attempt to walk the line between repairing Britain’s battered public realm, while sticking to a manifesto promise to balance the books without raising taxes on working people.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

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UK urged to protect Ukraine from legal action over private debt default

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Kyiv shouldn’t have to fight ‘shameless bondholders’ as repayment deadline nears, say campaigners

Campaigners are urging Britain’s new Labour government to prevent Ukraine being sued in the UK courts if the country defaults on its debts to private creditors.

Debt Justice said a two-year suspension of Ukraine’s debt payments was scheduled to expire on 1 August, and that action was needed to protect Kyiv from the possibility of legal action from its creditors.

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Asda-owning Issa brothers go their separate ways amid family rift

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Union warns of risks to shoppers and staff after Zuber Issa sells 22.5% supermarket stake to private equity co-owners TDR Capital

The billionaire brothers who part-own Asda have gone their separate ways, with Zuber Issa selling his shares in the supermarket to the private equity firm TDR Capital amid a rift between the siblings.

Zuber owned 22.5% of the Leeds-based grocery chain after a £6.8bn takeover alongside his older brother Mohsin and TDR three years ago. The sale of his stake had been expected for months, but was thought to have been complicated by lock-in agreements.

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Thames Water collapse could trigger Truss-style borrowing crisis, Whitehall officials fear

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Exclusive: Concerns over effect on UK’s finances lead officials to believe utility should be renationalised before general election

Senior Whitehall officials fear Thames Water’s financial collapse could trigger a rise in government borrowing costs not seen since the chaos of the Liz Truss mini-budget, the Guardian can reveal.

Such is their concern about the impact on wider borrowing costs for the UK, even beyond utilities and infrastructure, that they believe Thames should be renationalised before the general election.

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Moody’s cuts China credit outlook to negative as economy slows

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Rating agency says Beijing may need to bail out local governments as property sector collapses

China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy.

Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth.

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Bond market sell-off sends UK long-term borrowing cost to 25-year high

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Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

Britain’s long-term cost of borrowing has hit its highest level since 1998, as political instability in the US and fears of sustained high levels of inflation triggered a sell-off in global bond markets.

The yield, or interest rate, on 30-year UK government bonds hit 5.115% early on Wednesday, according to the financial data provider Refinitiv.

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Europe’s banks helped fossil fuel firms raise more than €1tn from global bond markets

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Exclusive: Pan-European investigation looked at thousands of transactions since Paris climate agreement in 2016

Banks including some of Europe’s largest lenders have helped fossil fuel companies to raise more than €1tn (£869bn) from the global bond markets since the Paris climate agreement, according to an investigation by the Guardian and its reporting partners.

In the push to zero carbon, Europe’s biggest lenders face growing pressure to limit their financial support for fossil fuel companies through direct loans and other financing facilities.

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UK and US shares climb as banks and ministers aim to calm Credit Suisse fears

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FTSE 100 rises and European banking shares are up after early jitters over what UBS takeover deal means for bondholders

Stocks climbed on Monday in London and New York after central bankers and politicians sought to soothe jitters triggered by the emergency rescue of Credit Suisse during the weekend.

Central banks in the UK and eurozone issued statements aimed at reassuring investors that – unlike the controversial approach taken by the Swiss authorities in the Credit Suisse deal – their jurisdictions would follow a hierarchy in which equity holders would lose out before bond holders.

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UBS agrees takeover of stricken Credit Suisse for $3.25bn

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Swiss government forces through takeover at well below market value amid fears of global banking crisis

The Swiss government has forced through the takeover of stricken bank Credit Suisse by rival UBS for almost $3.25bn (£2.65bn) – well below its market value – amid fears that a failure to protect depositors would trigger a new global banking crisis.

After a weekend of frantic talks, the Swiss government and the banking regulator brokered a deal once it became clear a $54bn loan to Credit Suisse from the Swiss central bank had failed to halt the precipitous slide in its share price.

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