Gilt rally offers partial reprieve for Rachel Reeves

Open the Editor’s Marking Free

Rulla Khalaf, the FT editor, chooses its preferred stories in this week’s news.

The decline in the cost of the loan was given to the British Chancellor Rachel, a larger room for maneuvers, as he tried to maintain his strictly fiscal rules, but state finance remains the economic prospect of the country’s deterioration.

British government bonds have deleted most of their losses since the October budget, bringing long-term loan costs, which are close to its tax and expenses, which accelerate their tax sales.

Friday, a ten-year-old gilded concessions, which are trampling the 16th year of the last month, below 4.93 percent, and 4.32 percent are predicted.

But Brushes This week, from the Bank of England, which halved its 2025 growth assessment, implies that the government will fight to rapidly curb in the coming years.

It “just shows how fast the mood is changed,” said Nick Hayes, head of AXA investment managers. “In the past, the Gilz was in” Doom Loop “. A number of a number and yields went to 5 percent. “

The recreation of wolves in the global bond rally and the prospect of reducing payments on BOE, which announced a quarterly reduction in the decreasing economic growth and relieving inflation.

The market move provided assistance for rabers, as he tries to maintain his own fiscal rule, the daily expenditures are covered by tax revenues.

The Budget Responsibility Office, the British Fiscal Guard’s Office, in October, said that the Chancellor is 9.9 billion pounds of the head, which he opposed his fiscal rule.

The further increase in GITT’s yield was forced by economists to warn that such a thin room was made by the third largest in 2010 with higher loan costs.

Andrew Gudwin assesses that Reeves now have a 5 billion pounds in a pound hall due to the GILT market, but the negative position in the depths of January sales is better.

But he warned that additional frames were obtained “pals” compared to what could happen [the OBR] changes its growth or earnings forecasts. ”

He added:

Many fund leaders have a similar analysis and disputed further cuts of expenses or tax rise needed to promote the UK’s fiscal position.

Economists say that if OBR sets a similar economic forecast for this week’s Bob scores To put pressure on public financedue to low increase in tax revenues.

BOE now expects GDP to grow only 0.75 percent this year before 2026 and 2027 gather until unemployment can rise up to 4.75 percent.

It has also become more pessimistic about the pace when the British economy can grow without pushing inflation.

In his annual shares on the supply of the economy, the Central Bank said that the possible growth rate of Great Britain, which is often described as a “speed limit” of GDP, from 1.5 percent to 2025.

Bow said he expects potential growth to be elected in the coming years, leaving his forecast by 1.5 percent.

Some economists predict that OBR may eventually have to reduce the possible growth forecast, taking into account the persistently frustrating performance of British productivity in recent years.

It will take a serious blow to public finances, as ORR forecasts are the basis of government budget programs.

The reduction of possible growth forecasts “Rachel Riekemy’s head would have a great impact on Rachel Riekes,” said Rob wood in the pantheon macroeconomics.

The Chancellor, he added, “desperately reluctant”, Hebrew does not decide to make such riots.