Bond market jitters, UK Budget preview, Trudeau’s immigration U-turn and more

Perhaps the most frequently asked question of the Capital Economics team is around fiscal risks and their implications for financial markets. There were more incoming this past week as Donald Trump looked to be doing better in the polls and more details about the UK Budget trickled out, all against a backdrop of rising bond yields. 

Group Chief Economist Neil Shearing discusses what’s behind the rise in yields and how bond investors perceive government commitments to getting a grip on public debt in the latest episode of The Weekly Briefing from Capital Economics. 

There’s more on the UK Budget too, with a preview of what to expect from Chancellor Rachel Reeves' Wednesday statement from Chief UK Economist Paul Dales and Deputy Chief Economist Ruth Gregory.

Plus, Canada’s population could shrink for the first time in over 150 years if Ottawa’s stringent new immigration targets are met. That has huge implications for the country’s economic outlook and for Bank of Canada policy, as Deputy Chief North America Economist Stephen Brown explains.

Analysis referenced in this podcast:

Payrolls preview: Temporary disruptions to stymie recent strength
https://www.capitaleconomics.com/publications/us-employment-report-preview/temporary-disruptions-stymie-recent-strength

Will Treasury bulls be able to face down the bond vigilantes?
https://www.capitaleconomics.com/publications/bonds-focus/will-treasury-bulls-be-able-face-down-bond-vigilantes

Key Issue: What to expect on UK 2024 Budget day
https://www.capitaleconomics.com/key-issues/uk-2024-october-budget

Canada's population decline will drag down GDP growth
https://www.capitaleconomics.com/publications/canada-economics-update/population-decline-will-drag-down-gdp-growth