{"id":11511,"date":"2026-07-20T02:01:45","date_gmt":"2026-07-20T02:01:45","guid":{"rendered":"https:\/\/stock999.top\/?p=11511"},"modified":"2026-07-20T02:01:45","modified_gmt":"2026-07-20T02:01:45","slug":"the-uk-is-getting-a-new-prime-minister-but-bond-investors-are-really-in-charge-and-hyper-reactive","status":"publish","type":"post","link":"https:\/\/stock999.top\/?p=11511","title":{"rendered":"The UK is getting a new prime minister, but bond investors are really in charge and ‘hyper-reactive’"},"content":{"rendered":"

<\/p>\n

Andy Burnham will become the United Kingdom\u2019s seventh prime minister in a decade on Monday, and must face the consequences of a bond market fiasco from three administrations ago.<\/p>\n

A report from the International Monetary Fund this week highlighted the baggage that still hangs over the world\u2019s fifth largest economy: a 2022 budget with unfunded spending hikes and tax cuts that sparked an investor revolt leading to the ouster of Liz Truss as premier after only 44 days.<\/p>\n

\u201cMarket feedback suggests that the September 2022 gilt market turmoil marked a structural shift in the fragility of the gilt market,\u201d it said. \u201cPolicy credibility and predictability are key to strengthening market confidence and reversing the impact of the September 2022 episode.\u201d<\/p>\n

The IMF added that foreign investors have become bigger participants in the U.K. bond market, estimating that global factors accounted for 60%-90% of the variation in yields between 2020 and 2026.<\/p>\n

That could leave the U.K. more vulnerable to volatile capital flows and \u201cfast money\u201d that\u2019s more price sensitive, the report warned.<\/p>\n

Burnham will likely chafe under that kind of influence. He complained in September 2025 that \u201cWe\u2019ve got to get beyond this thing of being in hock to the bond market.\u201d<\/p>\n

But the Labour Party leader will not escape its grip, according to Ed Yardeni, the Wall Street veteran who coined the term \u201cbond vigilantes\u201d in the 1980s, referring to traders who protested huge U.S. deficits by selling off bonds to push yields higher.\u00a0<\/p>\n

\u201cBritain soon will have a new leader. But investors know it\u2019s the bond market that will call the shots in the\u00a0$4.2 trillion economy\u00a0no matter who sits in the prime minister\u2019s office,\u201d he wrote in a note earlier this month, adding Burnham \u201cwill inherit the same hyper-reactive bond market\u201d that sank Truss.<\/p>\n

Bond investors kept former PM Keir Starmer and Chancellor Rachel Reeves on a short leash and sent yields up in response to their borrowing plans.<\/p>\n

For now, the market appears willing to give Burnham the benefit of the doubt, albeit without giving him much leeway, Yardeni observed, pointing out that foreigners hold\u00a0as much as 30%\u00a0of U.K. government debt.<\/p>\n

Reports indicating that Shabana Mahmood is the favorite to be named Chancellor of the Exchequer have cheered markets. But Yardeni cautioned that \u201cBond Vigilantes are restless.\u201d<\/p>\n

For his part, Burnham has view to be a pro-business leader, while emphasizing small local businesses over large firms.<\/p>\n

Still, he faces a tough balancing act: reviving moribund growth while also maintaining a fiscal policy that satisfies the bond market.<\/p>\n

Threading that needle could force Burnham to make politically unpalatable choices. The IMF report said hiking taxes on top earners would hurt the economy.<\/p>\n

\u201cTargeted increases in marginal tax rates towards the bottom of the earnings distribution, accompanied by more generous in-work transfers, would be more efficient,\u201d the IMF added.<\/p>\n

#prime #minister #bond #investors #charge #hyperreactive<\/p>\n","protected":false},"excerpt":{"rendered":"

Andy Burnham will become the United Kingdom\u2019s seventh prime minister in a decade on Monday,…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[1286,2929,113,8922,17424,92,571,2498,56,2748],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11511"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11511"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11511\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}