UK global headline news for all the wrong reasons
Macro News
The UK became global headline news last week for all the wrong reasons, with the £ hitting new lows and gilt yields spiking. By mid-week long term, gilt yields spiked to 5%. (Having begun the year at 1.1%, this is an unprecedented 450% increase in borrowing costs in 9 months).
This gilt market carnage threatened the solvency of the UK’s defined-benefit pension funds. The BoE was forced to perform a U-turn in its market intervention policy, cancelling plans for quantitative tightening (selling gilts) and implementing temporary measures to buy long-dated gilts to restore financial market stability.
UK Market News
No big company headlines today. The market is easier for choice as the domestic focus will be on the Conservative party conference and its implications for government policy and political stability after the climb-down on the proposed abolition of the top tax rate.
PROGnosticator
NB Prices are as at the previous day’s close.
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