The long -term loan costs of the United Kingdom have recovered from the new 27 years after the treasure revealed that the expected autumn budget will take place on November 26, which will also help remove the pressure from the pound.
The yield of government bonds of the United Kingdom at 30 years, also known as Gilt, exceeded 5,691% at one stage, since it previously reached a new maximum not seen since 1998.
Golden yields move against the value of the bonds, which means that their prices decrease when yields increase.
The pound, which suffered strong losses on Tuesday, also reversed the early session of the session to maintain 0.1% higher in US $ 1,341 and was stable at 1.15 euros.
The financial markets have largely focused on the next budget, with the liquidation in Gilts to a large extent to concerns about the public finances of Great Britain and, as investors seek guarantees on how Mrs. Reeves will plug a black hole in the public finances of the nation, estimated by some as of up to £ 51 billion.
But the recent pressure on the teeth has also arrived in the middle of a sale of bonds worldwide, since the bonds of the European government and the United States also see yields due to political uncertainty and public financial concerns.
Japan was the last to see his 30 -year performance sent upon flying, since he reached a historical maximum concerns about the increase in debts.
The governor of the Bank of England has emphasized that the increase in the long -term government's loan costs of the United Kingdom is part of a global pattern and said it is “important not to concentrate too much” in the longest long -term bond yields.
It occurred after the yield of the 30 -year -old government bonds, called Gilts, rose to a maximum of 27 years on Wednesday before going back later in the session.
Andrew Bailey told the select Treasury committee: “We have seen a performance curve throughout the developed world: the underlying driver of this is global.
“When you look at the yields of the United Kingdom with respect to the end, we are widely in the middle of the pack. Germany and Japan have increased significantly more than the United States, the United States less than us.
“It is important not to concentrate too much on the 30 -year link rate.
“It is a number that is quite cited. It is a fairly high number, but in reality it is not what is being used to finance at this time.
“There are many dramatic comments about this, but I would not exaggerate the 30 -year -old bond rate.”
The increase in the yields of these bonds means that it costs more to governments to borrow from financial markets.
But experts believe that a driver of weakness in the United Kingdom bond market could have been aggravated by concerns about the reorganization of the Government of the Prime Minister on Monday and the position of Foreign Minister Rachel Reeves.
No 10 insisted on Tuesday that the chancellor's authority was not being affected by the shake of Sir Keir Starmer in an attempt to calm the nerves of the market.
This week's reorganization saw the chancellor's deputy, Darren Jones, move on to a new role as the main secretary of the Prime Minister.
The Secretary of Health, Wes Streeting, told Sky News: “The chancellor, since it arrived last year, has decided to restore stability to our economy, to recover growth in our economy and create the conditions in which we can return the nation's finances to health.”
He said that while there are “signs of breath”, there is “much more to do.”
Mr. Streeting added: “Great Britain is not out of the forest, and that is why the discipline and approach that she (the chancellor) has contributed to the cost of living, in economic growth and the creation of the conditions for companies to succeed is really important, and the discipline that we show as a cabinet in terms of public spending is really important.”
London's FTSE 100 index raised 35.6 points to 9152.3 on Wednesday at mid -morning, while Gold previously reached new records once again, above $ 3,530 US dollars, since nerve investors went mass to the safe refuge asset.
Kathleen Brooks, director of Research at XTB, said that “it is likely that the approach remains in the budget for some time” and warned that bond markets will continue to see volatility.
She said: “The yields of the United Kingdom bonds have been in an ascending trajectory for most of this year and have increased significantly since the laborists assumed the position.
“The bond market will need considerable persuasion that the labor will stop public sector spending and put to control the United Kingdom finances.
“That is why we hope to see episodes of volatility of the United Kingdom bond market in the coming months.”
