I haven't even done the budget yet, and already I'm smashing records!!!
These are good numbers aren't they? Bigger the better?
The UK is now paying more to borrow for 10 years than it did during the 2008 financial crisis…
The 10 year gilt hit 5.22% yesterday. Highest since June 2008.
The 30 year went to 5.89%, which is the highest since March 1998. 28 years.
In January that 10 year was at 4.34%. So it’s up 88 basis points in 8 months.
Part of it is global. Oil is up on the Iran conflict, central banks have turned hawkish everywhere, and long-dated debt is getting repriced across every developed market at the same time.
But gilts are underperforming their peers and that part is domestic. There’s a Budget on October 28 and the market is pricing in what it might contain.
Markets now have a November hike at roughly 70% and a second one by February at 80%. At the start of the year everyone expected cuts…
Shop price inflation just hit a 2 year high, which isn’t helping.
Put this next to everything else. US 30 year at 5.29%. Japan’s 10 year above 3% for the first time since 1996. UK 10 year at 2008 levels.
Every major government is discovering what its debt actually costs at the same time.
If you want to know where I’m deploying capital, turn notifications on. A lot of people will regret not doing it.