Bloomberg News

I was recently featured on Bloomberg regarding the sharp rise in longer-dated UK bond yields earlier this week, triggered by growing market concerns over the sustainability of the UK’s public finances. While markets partially recovered after Prime Minister Starmer publicly backed Chancellor Reeves, the structural pressures remain. At LB MACRO, our long-standing view is that UK public finances are in the doldrums and the economy is at risk of falling into recession, thus inducing the Bank of England to cut more than expected. As a result, the yield curve to continue steepening, and sterling stay under pressure.