Brexit’s Safe Haven Is a Dangerous Place
Gilts are on a tear as investors escape U.K. stocks and the pound. But a no-deal Brexit or a Corbyn government would soon change their status.
Here's the port in the Brexit storm where everyone’s stashing their money.
Photograph: Barcroft Media
British investors have been fleeing their domestic stock market in droves all year, and everyone and their dog lined up to sell sterling on Thursday as the tally of resignations from Theresa May’s Brexit-plagued administration mounted. Gilts have become the haven of choice for those unable or unwilling to scrap all their U.K. exposure. But that search for safety could backfire if the political chaos brings down Prime Minister Theresa May.
The real and present danger to her and her draft Brexit agreement increases the risk of Britain crashing out of the European Union without a deal. That wouldn’t be good for anybody, including U.K. sovereign bondholders.