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Pound markets steady as investors expect no major policy shock this year

ING notes risk premia in UK bond markets are contained, but social housing, welfare, and fiscal-rule changes could affect UK asset perceptions over time.

Reported · Written up by our desk · Major Pairs

UK market reaction to Andy Burnham becoming prime minister has been comparatively calm, with risk premia in UK bond markets described as contained, according to ING analysis cited by FXStreet.

The view among investors highlighted by ING is that Burnham is unlikely to “rock the boat” within the current year, even as longer-run questions remain around the UK’s fiscal trajectory.

ING cautions that ambitious plans spanning social housing, welfare, and tax reform, along with potential changes to fiscal rules, could still shift sentiment toward UK assets over the coming years.

The analysis also flags that a snap election would be the key wildcard, and that markets likely would not welcome it.

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