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
This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.
Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position, and/or may perform services or solicit business from, any of the companies or related securities mentioned.
Any prices quoted in our research are as at the previous day’s close.