The U.K.'s $86 Billion Pension Problem Is About to Solve Itself
- Yield rise, life expectancy data could curb pension deficits
- Firms with big liabilities have underperformed since Brexit
BNP's Saywell Says BOE Will Not Hike Interest Rates
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For U.K. Plc, the sting of Brexit comes with an unexpected bonus.
With no effort on their part, the biggest British businesses may see pension deficits that have burdened them for years be practically wiped out if long-term bond yields rise 50 basis in the next year and they budget for slowing gains in life expectancy, according to estimates of New York-based consultancy Mercer. The Bank of England is expected to raise interest rates by that amount by November 2018 and it remains to be seen if that affects long-term bonds.