Pictet’s Mawby Says UK Debt Is More Prone to Liz Truss-Era Runs
- More spending needed to fund election pledges: Pictet’s Mawby
- UK bond market’s small size leaves it more prone to volatility
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Pictet Asset Management Ltd says long-dated UK sovereign debt is vulnerable to a selloff, given the next government will likely have to increase public spending and issue more debt to deliver on campaign pledges.
Jon Mawby, co-head of absolute and total return credit at Pictet, anticipates the UK yield curve will steepen after the election as investors price in higher fiscal risk in long-end gilts. The short end, meanwhile, should benefit from interest-rate cuts from the Bank of England.