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Pension funds and the collapse of the bond market
Shortly after Kwarteng’s £45 bn “mini” budget announcement, a sharp market-sell off occurred, as investors believed they should be compensated more for the risk they’re taking investing in the UK economy. Prices of long-term gilts suffered, especially for 30-year bonds whose yield rose from 3.48% to 5%, within a matter of days. When interest rates […]
Kwarteng’s gamble on the UK economy.
Recently, Kwarteng announced a £45bn tax-cutting package – the largest set of tax cuts in over 4 decades – which is planned to be financed using debt. This package includes a sharp reduction in taxes on dividends as well as the scrapping of the 45% top rate of income tax for high earners. The why? […]
