Tory donor says bets against UK government bonds ‘gifts that keep giving’
Multimillionaire and Tory donor Crispin Odey is among the hedge fund managers cashing in on the UK’s market meltdown, saying that his bets against Britain’s government bonds were “the gifts that keep on giving”.
The investor – who is known for profiting from the Brexit referendum by making similar bets – said his position against the pound had “been helpful”, adding that sterling was unlikely to gain substantial ground against rival currencies such as the dollar.
Odey said he believed the pound, trading at about $1.08 on Tuesday following Monday’s sharp fall, could fall further and hit one-to-one parity against the dollar. “It’s so close” to parity, he told the Financial Times, “I don’t think you can start getting bullish on sterling.”
The hedge fund tycoon also described his bet against UK government bonds – also known as gilts — as “the gifts that keep on giving”.
It comes after markets went into meltdown in reaction to the chancellor’s low-tax mini-budget on Friday, which some analysts said reflected concern about the prospects for the economy and rising debt levels in the run-up to the next election.
Sterling subsequently fell by nearly 5% at one point on Monday to $1.0327, its lowest since Britain went decimal in 1971.
Meanwhile, the yield – or interest rate – on five-year UK government bonds rose to 4.3% on Tuesday, severely increasing the cost of state borrowing, but resulting in a windfall for hedge fund managers such as Odey who critics say have controversially bet against the UK’s economic success.
While chancellor Kwasi Kwarteng previously worked as a consultant for Odey, the fund manager denied that he has benefited or gained any advantage as a result of that prior relationship.
“There’s a mad idea that one’s behind
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