Even Britain’s sovereign-debt, or “gilt”, market has settled down. Just months ago aby Kwasi Kwarteng, then chancellor of the exchequer, threatened it with catastrophe. But under Jeremy Hunt, Mr Kwarteng’s more competent and responsible successor, a repeat seems out of the question. As Mr Hunt prepares to unveil a new budget on March 15th, government borrowing is set to be £30bn lower this fiscal year than forecast in November.
shrivel compared with those in the rest of the world, from accounting for 13% of global equity value to just 4%. Initial-public offerings , though thin on the ground everywhere during last year’s market crash, were nearly unheard of in the City. Less than 1% of the capital raised through globalMeanwhile, barely a month has gone by without another250 firm deciding to leave London’s bourse. Recent examples include Aveva, Avast, HomeServe, Micro Focus and Ultra Electronics.
This vicious circle was kicked into motion by the gradual disappearance of a key buyer of domestic stocks. Defined-benefit pension schemes, today worth £1.5trn, have gone from having around a quarter of their assets invested in London-listed shares in 2008 to less than 2% in 2022.A combination of regulatory incentives and theschemes’ increasing maturity drove them away from the risk and growth potential of stocks and towards the safety of bonds.
To make matters worse, an even bigger buyer of gilts is departing at the same time. Through successive waves of quantitative easing, or large-scale purchases of government bonds with newly created money, the Bank of England has amassed an enormous portfolio of gilts. Now it, too, is in exit mode. The bank began selling its holdings in November, aiming to reduce them by £80bn per year.
This is the time to load up on uk stocks, TheEconomist always get market timing wrong. Uk stocks will go one way from here, UP.
No mention of the Bank of England letting inflation explode? Or that the BoE was still employing quantitative easing as inflation was closing in on double figures. Then the BoE telling the markets they would engage in extensive QT after the 'disastrous budget'.
Hardly languished … seen the charts lately. All time highs
Just blame EU 😉
It is mainly about the monarchy system. If you are interested, I can analyze it and tell you.Propose the establishment of Royal Investment Corporation.
China?
It's concerning to see that such core investors in UK government debt may be reducing their holdings. What can be done to reinforce investor confidence?
The latest ploy to become the 51st state of the US: 'nobody wants our money'. Ask Soros. He made a mint shorting it.
Let me guess, the Economist’s solution is to get back under Franco-German dominion in the EU?
Reversion to the mean
donnelly_brent
An island country cuts unfettered trade ties with mainland, Yet is puzzled by the consequences.
There is a strong sustainability race now. The UK is yet to create a full shift towards embracing sustainable solutions.
We had Brexit. At least we are in control of our destiny!
Err the country maybe next, btw the colonies won’t bail you out of your misery this time
The last couple of years, FTSE is outperforming. Since Nov 2020: FTSE +38% (27% in $ terms) S&P +18% Maybe you've written your languishing article on the wrong market?
Thanks Tony Blair
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