{"id":48293,"date":"2020-03-11T18:53:03","date_gmt":"2020-03-11T18:53:03","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=48293"},"modified":"2020-03-12T02:53:36","modified_gmt":"2020-03-12T02:53:36","slug":"of-course-the-bond-markets-arent-phased-by-more-borrowing-they-want-all-the-bonds-the-government-can-issue-and-then-some-more","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2020\/03\/11\/of-course-the-bond-markets-arent-phased-by-more-borrowing-they-want-all-the-bonds-the-government-can-issue-and-then-some-more\/","title":{"rendered":"Of course the bond markets aren\u00e2\u20ac\u2122t fazed by more borrowing: they want all the bonds the government can issue and then some more"},"content":{"rendered":"

The quality of UK financial commentary is always a cause for despair. This comment comes from the FT this afternoon<\/a>:<\/p>\n

The UK government announced its biggest annual borrowing plan in eight years on Wednesday, as Prime Minister Boris Johnson\u2019s government turns to bond markets to fund its spending spree.<\/p>\n

But investors were unfazed by the prospect of a deluge of new gilts, with many having expected an even bigger rise in issuance with borrowing costs close to historic lows.<\/p><\/blockquote>\n

Of course they were unfazed.<\/p>\n

Firstly that\u2019s because they really do not care about the return on bonds right now: they\u2019re buying them because they provide just about the only safe savings medium that is available in sterling right now.<\/p>\n

Second, for that reason they are desperate for more bonds and are delighted more are going to be issued.<\/p>\n

And third, they appreciate the fact that bond issues mean that they government might be providing a stimulus - which the UK economy badly needs.<\/p>\n

Of course they weren\u2019t phased. Unlike financial commentators they can see the value in more bonds.<\/p>\n

And I promise you, there are going to be lots of them.\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The quality of UK financial commentary is always a cause for despair. This comment comes from the FT this afternoon: The UK government announced its
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