• Britain’s long-term borrowing costs have surged due to investor concern that a potential change of prime minister could weaken fiscal discipline.
  • The term ‘bond vigilantes’ refers to debt investors who demand higher compensation for holding bonds of governments they perceive as profligate.
  • The war with Iran has pushed up oil prices and renewed inflation fears, further pressuring government bonds.
  • Higher government borrowing costs can spill over into higher lending rates for consumers and companies, risking economic and financial stability.
  • Debt is roughly equal to or higher than economic output across all G7 countries except Germany.

Sources & Links