Home›Bonds & Rates›Economy›BoE governor urges budget credibility after 10-year gi…

BoE governor urges budget credibility after 10-year gilt jump

The Bank of England governor said the 10-year rate is at its highest since July 2007 as investors reduce exposure to so-called safe-haven government bonds.

Reported · Written up by our desk · Economy

Bank of England governor Andrew Bailey urged UK Chancellor John Healey to set out a budget that is credible in the eyes of financial markets after the interest rate on 10-year UK government bonds reached its highest level since July 2007.

Bailey said medium-term borrowing costs have risen to a fresh 19-year high as investors sell government bonds previously viewed as safe havens, with concerns tied to fears of rising inflation.

The Bank of England governor warned governments caught in speculative crosshairs to avoid market turmoil that lifts the interest paid on debt, saying recent volatility in government bond markets has been influenced by international factors.

The report indicates Bailey’s comments were made as bond market moves were described as driven by factors beyond the UK but likely to increase pressure on Healey’s fiscal plans.

More like this

Sources