BlackRock Warns of UK Bond Selloff Risk as Election Year Begins
- Strategists are watching fiscal stance of political parties
- They are staying neutral on gilts as see BOE rates above norm
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BlackRock Inc., the world’s biggest asset manager, is warning investors of the risk UK political parties will promise much greater spending in a bid to win this year’s election, potentially sparking a revolt in the bond market.
While neither the Conservative nor Labour parties wants to put forward policies that could unnerve investors, that may change as the election draws near, said Vivek Paul, BlackRock’s UK chief investment strategist. Spending proposals are likely to emerge as Prime Minister Rishi Sunak said last week he plans to call a UK election in the second half of the year.