A beginner’s guide to appeasing the bond market – and why it matters

cityam

Jul 24

Bringing borrowing costs will be integral to Healey's success Britain’s enormous debt pile means the bond market now has the power to decide the fate of a government. Ali Lyon spoke to gilt investors ...

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Ali Lyon spoke to gilt investors ...</p>\n\n<a href=\"https://www.cityam.com/a-beginners-guide-to-appeasing-the-bond-market-for-a-new-chancellor/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"JPIE","symbol_name":"JPMorgan Income ETF","start_time":0,"source_url":"https://www.cityam.com/a-beginners-guide-to-appeasing-the-bond-market-for-a-new-chancellor/","article_id":"2653709101","we_media_id":null,"thumbnails":["https://www.cityam.com/wp-content/uploads/2026/07/Chancellor-Healey-will-need-to-keep-the-bond-market-happy.jpg?w=286&h=161&crop=1"],"rights":{"source":"cityam_highlight","url":"https://www.cityam.com/a-beginners-guide-to-appeasing-the-bond-market-for-a-new-chancellor/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2653709101","pubTimestamp":1784865600,"columns":[],"sourceInfo":{"source_id":"cityam_highlight","name":"cityam"},"weMediaInfo":null,"summary":"It is a fact of which Healey, the former defence secretary who spent five years in junior Treasury roles while Gordon Brown was in No 11, appears cognisant. Soon after taking Westminster off guard with his elevation to Chancellor, the Labour veteran went out of his way to reassure the country’s restive gilt traders.He and the Prime Minister, he told reporters, would “work in lockstep to meet the fiscal rules” – referring to the self-imposed spending straitjacket he inherited from his predecessor  and to which he has since recommitted. Alongside Burnham, he would also retain a “buffer against uncertainty”, he added – widely interpreted to mean keeping, or even expanding, the amount of breathing space between their spending plans and being in breech of those rules. And – as so many in his role have done before","collect":0,"end_time":0,"defaultTopTitle":"cityam.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"JPIE":"JPMorgan Income ETF","BNDW":"Vanguard Total World Bond ETF","UITB":"VictoryShares Core Intermediate Bond ETF"},"translate_title":"安抚债券市场的初学者指南--以及为什么它很重要","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"JPIE":1.5,"UITB":1.5,"BNDW":1.5},"content_text":"Bringing borrowing costs will be integral to Healey's success Britain’s enormous debt pile means the bond market now has the power to decide the fate of a government. Ali Lyon spoke to gilt investors to see how our new Chancellor can keep them happy.When John Healey was last in the Treasury, the world was a very different place. Britain’s economy was growing at a canter. The country was an integral part of the European Union, giving serious consideration to joining its fledgling currency. And government debt – that running sore of today’s developed economies – stood at a trifling 30 per cent of gross domestic product.A shade under two decades later, and life in the department responsible for safeguarding – and growing – the UK’s economy is altogether more challenging. Pandemic recovery aside, growth has failed to hit two per cent in any year since 2018. The UK has extricated itself from Europe, with all the potential upsides and pitfalls that decision brings. And the cash we – as a country – owe to the world’s dispassionate bond investors has more than tripled to stand at over 95 per cent of our entire annual economic output.Of those shifts, it is the latter that threatens to define Healey’s spell at the helm of our most powerful government department. The taxpayer now spends more than £110bn a year paying interest on debt that the country has racked up from running a budget deficit – where the state spends more than it receives through taxes – every year this century. Were it a government department, it would be the third largest; smaller than health and welfare, but bigger than education and, by some margin, defence.\n\nThe upshot of which is that swings in the price that investors require for holding our debt – swings which 20 years ago would have been a rounding error in the overall public purse – are now highly consequential. And the confidence that spectral bond market constituents have in our economic vision has taken on a historic importance.\n\n\n\n\n\n\nNews Updates\nStay ahead with our three daily briefings delivering all the key market moves, top business and political stories, and incisive analysis straight to your inbox.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nIt is a fact of which Healey, the former defence secretary who spent five years in junior Treasury roles while Gordon Brown was in No 11, appears cognisant. Soon after taking Westminster off guard with his elevation to Chancellor, the Labour veteran went out of his way to reassure the country’s restive gilt traders.He and the Prime Minister, he told reporters, would “work in lockstep to meet the fiscal rules” – referring to the self-imposed spending straitjacket he inherited from his predecessor  and to which he has since recommitted. Alongside Burnham, he would also retain a “buffer against uncertainty”, he added – widely interpreted to mean keeping, or even expanding, the amount of breathing space between their spending plans and being in breech of those rules. And – as so many in his role have done before him – he espoused his commitment to fiscal credibility: “the bedrock for economic and for national security”.Th bond market’s golden rule: stick to the fiscal rulesBut talk, in the cold-headed world of fixed income, is cheap. And so warm words aside, how might our new Chancellor best navigate this brave new world – one which he has watched come to define our economy from stints in the shadow cabinet and as defence secretary, but which he must now learn to manage himself?\n\n“Bond investors reward governments that are boring, predictable and fiscally disciplined,” James Carter, co-head of fixed income at W1M, told City AM. “Stick to the rules, avoid surprises and don’t announce spending commitments without explaining how they’ll be paid for.”“One thing the bond market really does not like is surprise,” added Oliver Faizallah, head of fixed income research at Raymond James. “What Healey could do that would be of negative consequence to the bond market would be to announce any big spending without clarity on how it’s going to be funded.”","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}