UK Bond Market Braces for More Losses After Truss’s Energy Plan By Bloomberg

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*UK BOND MARKET BRACES FOR MORE LOSSES AFTER TRUSS'S ENERGY PLAN - 🇬🇧🇬🇧

) and Credit Suisse already are anticipating the BOE will deliver a 75 basis-point increase in the base rate to 2.5% this month. That’s on top of the half-point rise in August, the biggest boost in 27 years.

Higher rates in financial markets and from the BOE would add to the strains facing consumers, who are struggling with the worst squeeze on their spending power in a century. “This will mark a huge step change in net gilt issuance that will clash with Bank of England quantitative tightening and hikes,” wroteNatWest Markets UK rates strategist Imogen Bachra is envisaging a “regime shift” for gilts due to these headwinds, forecasting 10-year gilt yields hitting 4% by year-end. Gilts could also suffer from the faltering demand from pension funds and foreign investors, according to HSBC.

 

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