Category: financial markets

How could a bond market crisis unfold?

The yields on UK government bonds, commonly known as “gilts”, are now consistently the highest among the G7 group of advanced economies. Why is this, and why should the rest of us care? The numbers alone are disturbing. The cost of new government borrowing for ten years is now around 4.8% in the UK, compared … Continue reading How could a bond market crisis unfold? →

Will the UK need an IMF bailout?

This weekend the Sunday Telegraph led with Britain ‘heading towards IMF bailout’, citing three leading economists who are warning of a “1970s-style debt crisis unless the Chancellor changes course”. The three – Jagjit Chadha, Andrew Sentance and Willem Buiter – are not the usual suspects and their views should be taken seriously. The story was prompted … Continue reading Will the UK need an IMF bailout? →

The Government cannot take credit for the cuts in UK interest rates

The Bank of England’s decision to trim its key interest rate by another quarter point this week was widely expected, but there is still plenty to write about. Unfortunately, little of this is good news. For a start, why on earth is the Monetary Policy Committee (MPC) still cutting rates when the Bank itself now … Continue reading The Government cannot take credit for the cuts in UK interest rates →