You'll have seen some reporting of a sell off of UK public debt before the market 'rallied' on reports that Rachel Reeves job was safe, which (as the FT suggests) points to the precarious profile of the UK's fiscal stance.
The Q. for those of us who think the UK's public debt *could* be expanded to fund a 'proper' socio-economic recovery, is how do you either get bond market investors on side, or diminish their impact on debt issuance?
Currently Reeves' fiscal rules do that job.
The #ft also points out elsewhere that the rally was driven by big players who saw an opportunity for a bargain. Which suggests to me - at any rate - that confidence may be rather less fragile than various commentators and interested parties suggest. #uk #gilts may well be seen as less risky than #ustreasuries in current circumstances. It may just be enough for the #uk to build in a bit more headroom/resilience into its projections to avoid 'bear raids' on #gilts .
Another change which would be wise would be to move the term structure of #gilt issuance back towards longer term bonds. This would put servicing costs of public debt up a bit but would reduce the amount of refinancing required. The term structure of debt was a past source of stability which was jettisoned too lightly by #georgeosborne ! This may look like #financialrepression but if so it is hardly the 'full fat' version that existed between the 1930s and the 1980s.
yes, I think both points are pretty much right; given the overall context UK gilts really look pretty attractive... & certainly a move back to longer terms would make sense as it would then reflect the fiscal rules' logic
Emeritus Prof Christopher May
Donald Roy