Funding fears miss the point
Article Abstract:
There has been little demand for a UK government auction of government securities (gilts) in Sep 1995. There is concern over the impact of likely tax cuts on the budget deficit and existing levels of government borrowing. Some analysts argue that there may be an improvement in the borrowing requirement toward the end of 1995, and that borrowing has had to increase due to slower economic growth, so there is little inflationary pressure. The deficit is likely to improve in the long term and is low in relation to the rest of Europe.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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UK gilts: gilt gloom
Article Abstract:
UK investors are concerned as to the direction of yields for government securities (gilts). Morgan Stanley argues that a growth rebound will occur in the UK in 1996, and the market has not yet taken this into account when pricing gilts. Interest rates do not appear likely to rise for political reasons, and there may not nothing to prevent economic growth from speeding up. Inflation could thus revive. There is also concern over growth of the UK money supply and lack of credibility for UK monetary policy.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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UK gilts: risk premium
Article Abstract:
Political factors are likely to have an impact on UK government securities (gilts) as an election approaches. There is a risk that the existing government could loosen economic policy excessively, and that the Labor Party could win an election and be too relaxed on inflation, or borrow too much. The Labor Party has stated that it does not intend to change inflation targets, and a risk premium could disappear if the party is elected and shows it is serious about controlling inflation.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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