Daily Politics from the New Statesman The bond markets could bring down Rachel Reeves
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Nov 19, 2025 In this chat, Will Dunn, the Business editor for the New Statesman, dives deep into the world of bond markets. He explains the concept of 'bond vigilantes' and how these market players can influence government borrowing costs. Listeners will learn about the mechanics of bonds, the volatility traders thrive on, and the political risks hedge funds analyze. Dunn also discusses how UK political dynamics impact gilt yields and why Rachel Reeves might not have the support she expects from the markets.
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Markets Price Political Credibility
- Bond markets act as global, efficient price-discovery mechanisms for government debt.
- Their trades reflect collective judgments about inflation, borrowing and political credibility.
Gilt Market Changed, Volatility Rises
- The UK gilt market has become more volatile as ownership shifted from long-term pension investors to faster, leveraged players.
- That change makes government borrowing more dependent on short-term market sentiment.
Learn Gilts Or Risk Market Punishment
- Governments must understand gilt yields and market mechanics to avoid policy missteps.
- Failing to grasp yields risks repeat market crises like 2022's mini-budget sell-off.