Gilt investors warn Reeves she may need to raise taxes

Quick Summary:

There is now a risk, investors have warned, that if the government does not come forward with a further fiscal tightening, gilts sell off further as investors build in more of a “fiscal risk premium” into the debt.

Recent gains in bond yields, if sustained, would be sufficient to more than erase the £9.9bn of fiscal headroom Reeves left herself in her October Budget.

Mahmood Pradhan, head of global macro at Amundi Investment Institute, said the UK government “should not be boxing itself in by ruling out tax increases” and that “pledges of spending restraint alone may not be sufficient to convince the markets”.

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Article Details

Author / Journalist: Ian Smith

Category: MarketsFinanceInvesting

Markets: United States

Topics: Budget Reeves Government Fiscal Spending Rules Financial Investors Global Bond Yields

Source Website Secure: Yes (HTTPS)

News Sentiment: Negative

Fact Checked: Legitimate

Article Type: News Report

Published On: 2025-01-15 @ 05:00:27 (16 hours ago)

News Timezone: GMT -5:00

News Source URL: ft.com

Language: English

Article Length: 772 words

Reading Time: 5 minutes read

Sentences: 27 lines

Sentence Length: 29 words per sentence (average)

Platforms: Desktop Web, Mobile Web, iOS App, Android App

Copyright Owner: © Financial Times

News ID: 25169362

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