What are 'bond market vigilantes' and what does this mean in the run up to a UK election?
We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.
Newsroom
Newsroom articles are published by leading news agencies. Hargreaves Lansdown is not responsible for an article's content and its accuracy. We may not share the views of the author.
HL Podcast
HL Insight
We look at what 'bond market vigilantes' are and the impact this could have in the run up to the UK general election.
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
Published on 25 January 2024
It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.
Just the term ‘bond market vigilante’ strikes fear into the heart of most finance ministers. Surveying the bond market, protesting against any fiscal policies they see as inflationary, even costing former Chancellor Kwasi Kwarteng his job back in October 2022. They raise their heads every so often, and when they do, politicians and Treasury officials should pay attention.
When a ‘bond market vigilante’ spots a government doing something they don’t like, they sell that government’s debt. This can push up government bond yields, since bond yields move in the opposite direction to price.
When government bond yields go up it makes borrowing more expensive and can even threaten the economic stability of a country. This is why governments fear ‘bond vigilantes’, because they’ve got the power to enforce change even in strong economies.
So, who are
Read more on hl.co.uk
