U.K. government bonds, or gilts, remain sensitive to inflation risk from near-term government spending initiatives, ING's Michiel Tukker says in a note. Gilt investors are more concerned about the U.K. inflation outlook than sovereign risk, Tukker says. More fiscal expansion from the government in the near term could again delay the prospect of inflation reaching the target of 2%, he says. The U.K. government has set out plans to increase defense spending. Andy Burnham--the likely candidate to replace current Prime Minister Keir Starmer--is also expected to favor additional government spending. Ten-year gilt yields rise 5 basis points to last trade at 4.813%, Tradeweb data show. (miriam.mukuru@wsj.com)
Dow Jones Newswires
Gilt Market Remains Vulnerable to Inflation Risk — Market Talk
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U.K. government bonds, or gilts, remain sensitive to inflation risk from near-term government spending initiatives, ING's Michiel Tukker says in a note. Gilt investors are more concerned about the U.K. inflation outlook than sovereign risk, Tukker says. More fiscal expansion from the government in…