‘UK borrowing costs jump, gilt yields surge to highest since 1998’. If you’re an investment insider, those headlines might have a deeper meaning. Most, however, may know it’s not a good thing, but have no idea why. Well, there £zillions of notional pieces of paper out there which say lend us (the UK Government) £10,000, we’ll pay you 4% a year and then give you your money back in 10, 20 or 30 years. Those are bought and sold on stock markets- at the moment, mainly sold for less than their face value, as faith in our leaders is a tad reduced. If you buy that £10,000 for £8,000, it still pays you 4% of £10,000. So you’re getting an actual return of 5%; which they will have to match if they want to borrow more; which they’ll have to if they’re not putting up income tax; which apparently they’re not. See previous.
Budget Rumours and Possibilities
The Budget Rumour Machine is not the shambles it was last year. Before Rachel’s Swansong all sorts of stuff was leaked to see what sort of puddle it would create.
