Rachel Reeves squeezed by rising borrowing costs and spending pressures

A Global Bond Market Sales Sales Sales Sales Sales Sales The UK Chancellor Rachel Reeves and its self-sufficient financial rules arise by the US Debt Fear.

In recent weeks, the 30 -year -old yield of the United States and the Japanese government bonds on Friday, the yield of 30 years reached the higher of 27 years and is closed on Friday 5.48 percent.

Meanwhile, the 10 -year -old Gild Yield in the UK has seen the most closely seen by the Benchmark Debt investors, excluding Japan in the last one year than the equivalent of any other G7 country.

UK’s economic growth is still transparent, investors have warned that it is Reeves In order to balance the daily expenditure with revenue by 2021-5, the public’s expenses need to be deducted or raised again.

“Gilts is in the crisp,” Asset Manager Nuvin’s Global Fixed Head Chief Anders Person said.

The expenses of taking higher orrows are wheeling in the financial room of Rivers, just as he spends on the deadly political pressure to relax his gust.

Prime Minister Sir Care Starmer announced last week Opposite plan At least £ 1.5bn of annual savings have been identified from the removal of winter fuels, except for the poorest pensioners.

He Wants to end Two Children’s Benefit Caps, at a potential cost of about $ 3 billion a year. Deputy Prime Minister Angela Raina has suggested hiking taxes, especially in the better position to fill the holes in the fiscal year.

Like other countries in Europe, Britain is forced to raise the cost of defense in response to the Trump administration’s call.

Global events have made life stronger for Reeves this year. US Treasury has been sold in response to anxiety over Donald Trump’s trade war and the huge tax he is cutting through the Congress. Bund has found similar growth in yield After German leaders signed a Historic Tihasik agreement for money to invest in the country’s military and infrastructure. The yields are reversed in prices.

Person said Gilts’s “advanced relations with Treasury and Bunds have weakened in their recent financial-driven sales-sales,” Person said. “But the UK-specific risks are making the pain more widespread.”

Person points to the UK’s stubborn inflation, which was a careful position of the Bank of England on the interest rate on the tri-facing division among policy makers this month. He said that this division has given slow advice to reduce the rate “despite the signs of weak underlying growth”.

However, some analysts have argued that the wrong steps have weakened the country’s budget elasticity, which has led to the risk of bond market unrest.

These include the decision to run with only $ 9.9 billion headroom against the daily expenditure rules of Reeves, as well as Labor’s promise that it will not increase the main revenue rises like VAT or income tax.

A bond-selling program by BOE is also adding to the nerves about hunger among the larger investors for long-dates Debt.

Isabel Mateo Lago, chief economist of the BNP transport bank, says: “Many times these markets tend to look for outsiders – places where things can be fascinated – and unfortunately the UK discovers itself in this category.”

He said the budget responsibility to reduce the forecast of an “external shock” of the global economy and strengthen the budget could lead the office to monitor the UK financial surveillance, he said.

The hardness of Reeves’ financial rules “actually hurts the credibility of the UK because they had to hurt themselves so much to meet them”, adding Matios Wi Lago. “This is an unfortunate place for the UK.”

Treasury said: “Financial rules are non-negotiable. We placed them to create stability and support investment.

Consultant Oxford Economics, UK economist Andrew Goodwin, assumed that the market movements were engraved in its £ 9.9bn headroom after the Spring Statement on 2 R March.

“They became the author of their own misfortune with such a little headroom,” he said.

Some investors said that the rules would be at risk to relax and simplify the expenditure cuts or tax growth.

“The United Kingdom is already out of the financial place,” said Mark Dowling, a fixed income of the Asset Management in the RBC Blue.

“Any attempt to inherited what happened to the Lease TRS is due to the risk of the market for the market,” he added, referring to the then Prime Minister’s September 2022’s bad-determined “mini” budget.

Pimco’s economist Peder Back-Freys added: “It seems like they need to be more financially financially in the autumn.”

There is another threat from OBR’s forecast for long -term UK growth, which is seen as consistent with the evaluation of other analysts because of the view of Britain’s productivity.

Any downgrade on its productivity growth forecasts, which can come up with October, will push the strained public finance further.

Ruth Gregory, economist of the research agency Capital Economics, says that if OBR deducts its forecast from 0.8 percent to 0.8 percent a year to 1 percent from 1 percent to a year from 2021 to 2021, “which can reduce the financial headroom by about $ 20 billion.”

“Reeves had made a big bet last October without having almost any headroom,” said Paul Johnson, head of the Institute for Fisical Studies Think-Tank. “It doesn’t look like he will escape from it.”

Visualization of data by Keith Fray