Rates Spark: UK Political Risk Closely Tied To Inflation Outlook

This report examines how UK political and fiscal risks, particularly near-term spending plans, continue to drive volatility in sterling rates amidst ongoing inflation concerns. Simultaneously, it highlights a resilience in US 10-year Treasury yields, which are trending higher despite soft economic data.

Key Takeaways

• 1.Sterling interest rates remain highly sensitive to near-term fiscal spending due to persistent UK inflation risks.
• 2.US 10-year Treasury yields rose back above 4.45% despite weaker-than-expected consumer confidence data.

Table of Contents

• Sterling rates to stay sensitive to near term spending plans
• And just like that we're back at 4.45% for the 10yr UST
• Wednesday's events and market views

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