UK gilt market under renewed stress
Key Questions
What are the current levels of UK gilt yields?
Gilts have reached around 4.7% for 18-year highs due to Middle East tensions, CPI pressures, BoE holds, and fiscal strains. Factors include $100/bbl oil and flat GDP.
What factors are stressing the UK gilt market?
Pressures include Middle East spikes, China energy halt, benefits changes, foreign aid cuts, and pensions Bill tweaks like 10% DC and 5% UK assets cap. February's £14.3bn PSBR adds to the strain.
What changes are planned for the Pension Schemes Bill?
The UK government plans to limit the controversial reserve power clause in the Pension Schemes Bill. This aims to address concerns over its scope.
Gilts ~4.7% 18yr highs from ME/CPI/BoE hold/$100/bbl/fiscal/GDP flat/China halt/benefits/foreign aid cuts/pensions Bill tweaks (10% DC/5% UK assets cap); Feb £14.3bn PSBR; ME spikes incl Chagos; Reeves plans; locals vol; student loan cap adds fiscal hit; Tories blame Lab weak economy.