UK Bonds Plunge as Government Ramps up Borrowing More Than Expected
- Ten-year sovereign gilt yield set for biggest jump on record
- Money markets expect percentage-point BOE hike in November
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Investors dumped UK assets, sending bonds on a historic plunge and the pound to a 37-year low, as the new government’s stimulus will balloon the country’s debt and stoke inflation.
The yield on 10-year bonds jumped 35 basis points, set for the biggest increase on record, after Chancellor of the Exchequer Kwasi Kwarteng outlined tax cuts and spending plans. The pound plunged as much as 3.2% against the dollar to below $1.09 for the first time since 1985.