Rachel Reeves was hit by a new sale in the government bond market on Tuesday and emphasized a tremendous challenge faced by the prime minister to the fall budget.
The highest level of return or interest rate for the UK government debt at 5.723%since 1998 is more expensive for the UK to borrow from the market.
Rising yields when bond prices fall are measures of interest rates required when investors borrow from the government or company.
Increased government bond yields
As the British government's bonds became known, the rate of return on long -term lengths reversed the global change of borrowing in other major economies in fear of US policy.
Carsten Jung, the deputy director of the economic policy policy of IPPR Thinktank, said that this movement is not about the UK. Finance officials pointed out that similar yields will increase in Tuesday, Germany, the United States and France.
However, as the government has already spent more than 100 billion people a year for UKS debt, the latest jump emphasized the degree of restrictions on the bond market.
The 10 -year gold leaf return, which is used by the independent budget liability office (OBR) to predict future government borrowing costs, has risen on Tuesday, the highest level since January.
Meanwhile, the pound weakened, and in early April, when Donald Trump began a global trade war, the worst day, the worst day, fell 1.5 cents to $ 1.3390.
Pound value is low
This latest Market Jitters has been shaking the main characters in NO 10, which is widely read in Westminster, with an attempt to get a solid grip on Keir Starmer's economic policy.
Daren Jones, deputy director of Daren Jones, played a new role as a secretary of Starmers and was pushed to appoint a new Heavy Economic Advisor, former British Bank MINOCHE SHAFIK Governor.
Kathleen Brooks, the researcher at XTB, suggested that the prime minister is being managed.
In early July, Brooks jumped, worrying that the threat to the reissue position was finally, and the bond yield could be replaced by the Labor Party's more leftist member.
In July, the superintendent of the House of Representatives shed tears at the House of Representatives and speculated that investors could be replaced by more expenditure alternatives.
Brooks confirmed that the UK is not unusual in the current bond market, but added: When it led to the budget, the ministerial options were narrowed and the bond market volatility occurred more often. We are not stressed by the Liz Truss level in the British bond market, but the market's Starmer Moment can line up.
Reeves argued that some Labor Party MPs unnecessarily limit the scope of the government and reflect the actual limit of investor appetite for UKS debt.
The rules applied within five years should be balanced in everyday expenditures and tax receipts and reduce debt at the ratio of GDP.
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With an unexpected budget by mid -November, the gun is expected to raise additional income by raising new taxes to rebuild the headroom for this rule.
City Consultancy Capital Economics predicts that weak OBR forecasts should be raised 18-28 billion to leave themselves with 99 billion buffer.
According to Marcus Jennings, a fixed income strategist at Schroders, a recent report on raising potential budget taxes was worried about bond investors.
In extensively, the specific policy has not been independent of the sale of government bonds, but the back of potential policy reminds us how difficult the UKS finance is. Jennings is likely to increase yields in the UK despite the global movement of long -range yields, Jennings said.
The Treasury wants to weaken some of this speculation. Bank shares fell sharply last Friday after proposing taxes on high profitable sectors. The ministers are also considered to check the options to impose more taxes on their property.
Officials argue that tax changes will focus on increasing economic efficiency, and the focus of Reevess Central will continue to improve UKS productivity.
It is a downgrade of the OBRS forecast of future productivity that British workers can produce in one hour, and are the main decisions of economic growth that must be weighted on the budget plan.
The expectation of the institution for productivity is more optimistic than many other predictors and recently disappointed in the past.
Due to the back bench rebellion, after downsing streets abandoned the 5 billion obstacles earlier this year, the lack of reconstruction rules seems to have not been closed through significant expenditures.
While bond prices fell on Tuesdays, traders were piled up in precious metals on airplanes for safety. As a result, gold prices have risen to a new record of $ 3,508 ($ 2,607) on Tuesday, and for the first time since 2011, Silver has risen more than $ 40 per ounce.
Anxiety about fiscal sustainability is another factor that strikes the bond market, and the recent tax reduction and expenditure bills of Donald Trumps are expected to add a trillion dollar to US national debt. The recent attack on the independence of the central bank also vowed investors.
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