The return of UK fiscal risk premia: 6% is the tipping point
Since the UK local elections in early May, UK yields have risen across the entire yield curve. Ten-year yields rose to levels of above five per cent, and 30-year yields rose to levels of just under six per cent. These yield rises are highly important. Every one per cent rise in ten-year gilt yields results in an increased fiscal cost of around £30 billion over the subsequent four years (This timing would cover the remainder of the current parliament), effectively wiping out UK Chancellor of the Exchequer Rachel Reeves’ fiscal headroom. The May 7 local elections were a game-changer because…
For a limited time, get your first month for €1 and unlock full access to The Currency and The Wall Street Journal – two premium memberships, one subscription.
Subscribe
Cancel at any time.
Are you already a member? .
