Category Archives: Gilts

Rachel Reeves targets UK’s wealthiest in £26bn tax-raising budget

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Chancellor axes two-child benefit cap and cuts energy bills paid for by mansion tax and freezing tax thresholds

Rachel Reeves targeted Britain’s wealthiest households with a £26bn tax-raising budget to fund scrapping the two-child benefit policy and cutting energy bills.

On a chaotic day that involved key details of her budget accidentally being released early by the Office for Budget Responsibility (OBR), the chancellor defended the measures, saying she was “asking everyone to make a contribution to repair the public finances”, but that she wanted the wealthiest to pay the most.

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France is in crisis but bond markets leave other governments at risk of meltdown too

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Investors rattled by resignation of French PM but country is not alone in trying to grapple with political maths

Sébastien Lecornu’s abrupt resignation as the French prime minister on Monday after less than a month in the role marked the latest clash between France’s stretched public finances and its polarised politics.

Lecornu was the latest prime minister to try and fail to cobble together a package of spending cuts and tax rises that would pass muster in a parliament without a clear majority, and contain mounting bond market pressures.

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IMF warns of ‘significant risk’ to global economy from Trump tariffs as markets plunge

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Fund boss Kristalina Georgieva says it is important that US and trading partners avoid escalating trade war

The International Monetary Fund (IMF) has warned that Donald Trump’s implementation of swingeing tariffs poses a “significant risk” to the global economy, as stock markets were hit by a punishing worldwide sell-off by investors.

Kristalina Georgieva, the managing director of the IMF, said it was important that the US and its trading partners avoided further escalating Trump’s trade war, while stock markets plunged on Friday as China retaliated against the tariffs.

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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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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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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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The Bank of England’s lifeboat is in choppy waters with its bond buying

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Pensions hedging crisis shows how the City never seems equipped to handle the next big financial hazard

Pension funds have found themselves embroiled in a byzantine world of exotic financial trading that many of them appear to have badly misunderstood.

On Tuesday, a third rescue mission in little more than a fortnight was announced by the Bank of England, which is reprising its role in the 2008 financial crisis as the City’s lifeboat.

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Kwarteng considers extending mortgage guarantee scheme

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Initiative may continue beyond December as bank bosses raise concerns over mortgage market

The chancellor is considering extending the government’s mortgage guarantee scheme after UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.

The meeting on Thursday – which was attended by chief executives including Alison Rose of NatWest, Charlie Nunn of Lloyds Banking Group, HSBC UK’s Ian Stuart, Mike Regnier of Santander and TSB’s Robin Bulloch – was scheduled amid mounting fears about the potential fallout from rapidly rising mortgage rates.

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