- Bank of England increases daily limit of gilt purchases, but calls stop to action
- Widening credit spreads indicate recession fear for UK and eurozone
- Rate risks the main focus for US investors
In principle, reducing the tax burden and incentivising innovation are sound ideas. The trouble is the UK is in no position to make a sudden a pivot and another week of forced intervention in bond markets by the Bank of England (BoE) underlines the precarious stability of Britain’s financial system.
Much blame can be apportioned to the cost of the energy price cap for consumers and businesses, the overhang from Covid-19 bailouts and the simple fact the country has been spending beyond its means for decades. All that said, the signal given to markets by the UK government has been reckless, naive and frankly amateurish.