Britain’s Political Crisis Spooks Crucial Overseas Bond Buyers

Bond-market volatility sparked by the UK’s latest political crisis is serving up a reminder that the government can’t take foreign demand for granted.

About a third of the government’s gilts is in the hands of overseas investors who can easily shift money elsewhere during a crisis and are spoiled for choice in a world awash with debt. Officials have warned about the growing role played by hedge funds that may be forced to unwind leveraged trades if the bond market moves the wrong way.