Friday Workout —The North Atlantic Peso; On the Slither Screen

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Friday Workout —The North Atlantic Peso; On the Slither Screen

Chris Haffenden's avatar
  1. Chris Haffenden
15 min read

Investors are starting to need higher compensation for investing in the UK as evidenced by sterling corporate credit yields breaking through the 5% barrier last Thursday. Gilt yields are soaring, with the 10yr UKT now at 3.1%, up from 2% just three weeks ago. Markets are not only finally waking up to the huge fresh borrowing requirements under Liz Truss’ new tenure as PM, but are also realising that the pound may have to weaken significantly to attract foreign buyers of UK Gilts. Risk premiums to Europe are rising, as shown by ICE below (hat tip BofA research).

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