{"id":1650209,"date":"2022-09-21T05:06:24","date_gmt":"2022-09-21T09:06:24","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1650209"},"modified":"2022-09-21T05:07:06","modified_gmt":"2022-09-21T09:07:06","slug":"confidence-in-uk-assets-on-thin-ice-investors-warn-reuters-poll","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/confidence-in-uk-assets-on-thin-ice-investors-warn-reuters-poll\/","title":{"rendered":"Confidence in UK assets on thin ice, investors warn \u2013 Reuters poll"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fconfidence-in-uk-assets-on-thin-ice-investors-warn-reuters-poll%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1650209&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Andy Bruce<\/p>\n<p>LONDON (Reuters) \u2013     Investor confidence in British assets sits on the edge of a precipice as new finance minister Kwasi Kwarteng readies his first fiscal update, a Reuters poll of bond strategists and economists showed on Tuesday.<\/p>\n<p>Kwarteng is due on Friday to outline his plans to support households and businesses through the coming winter, an event investors say will be a critical test of confidence in Britain\u2019s economy and public finances.<\/p>\n<p>Slightly more than half \u2013 55% \u2013 of the international banks and research consultancies polled by Reuters last week said there was a high risk confidence in British assets would deteriorate sharply in the coming three months.<\/p>\n<p>Fifteen out of 29 respondents said the risk was high, including three primary dealers of British government bonds. One said the risk was very high. The remaining 13 said the risk was low.<\/p>\n<p>While currencies all over the world have fallen against a surging dollar and rising inflation has hammered government bonds prices everywhere, Britain has suffered worse than most.<\/p>\n<p>The pound lost 7.0% of its value against the dollar during the three months to Tuesday, one of the worst performers of 10 major currencies.<\/p>\n<p>Ten-year government bond prices have fallen much further in Britain over the same period than in France, Germany, Italy and the United States \u2013 something that cannot be explained away by currency movements alone.<\/p>\n<p>These shifts in part reflect investors\u2019 worry that Britain\u2019s reliance on imported energy will leave it exposed to higher inflation for longer.<\/p>\n<p>But there are also doubts about the economic agenda of new Prime Minister Liz Truss, who has announced a hugely expensive plan to subsidise energy bills in combination with tax cuts \u2013 policies which have yet to be costed.<\/p>\n<p>\u201cTrust is fleeting\u2026 and Truss would be wise to reassure markets that she has a plan to pay for these expenditures,\u201d said Rabobank strategist Bas Van Geffen.<\/p>\n<p>DASH FOR GROWTH<\/p>\n<p>Kwarteng, appointed as chancellor of the exchequer this month, has defended the new government\u2019s plans, saying Britain has more room to borrow than other countries that have a higher share of public debt to economic output.<\/p>\n<p>Kick-starting growth is the best way to get stronger tax revenues which will restore the public finances over the medium term, he says \u2013 although some economists warn this approach recalls the ill-fated, inflationary policies of the 1970s.<\/p>\n<p>\u201cThere has already been a clear deterioration in investors\u2019 outlook on the UK, so the bar for further sharp deterioration is high,\u201d said Adam Dent, strategist at Santander.<\/p>\n<p>\u201cBut the new, inexperienced government faces great challenges and could easily make missteps which add to investors\u2019 concerns.\u201d<\/p>\n<p>British assets endured a bruising August \u2013 sterling fell 4.5% that month, now trading around levels last seen in 1985, and the 10-year gilt rose more than 100 basis points.<\/p>\n<p>Some respondents pointed to a difficult global economy and said Britain was not alone in its challenges.<\/p>\n<p>\u201cWe see investor sentiment looking frail across many regions and asset markets. Nonetheless, the UK does look a little more vulnerable than most,\u201d said James Knightley, economist from ING.<\/p>\n<p>The poll suggested the 10-year British government bond yield \u2013 which touched an 11-year high of 3.292% on Tuesday \u2013 could be close to a peak, with the median forecast pointing to a move below 3% in three months\u2019 time.<\/p>\n<p>\u201cWe believe monetary policy tightening, particularly in the U.S., could be rapidly reversed through the second half of 2023, prompting a plunge in longer dated yields next year,\u201d Dent from Santander said.<\/p>\n<p>Still, 86% of forecasters \u2013 Dent included \u2013 said the risks to their yield forecasts for global government bonds were skewed to the upside. [US\/INT]\n<p>\u201cIf higher inflation becomes a more structural phenomenon\u2026 yields could also turn out to be structurally higher,\u201d Rabobank\u2019s Bas Van Geffen said.<\/p>\n<p>(For other stories on major government bond yields and money market rates:)<\/p>\n<p> (Writing by Andy Bruce; polling by Prerana Bhat and Swathi Nair; editing by Jonathan Oatis)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/confidence-in-uk-assets\/illustration-shows-pound-banknotes\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8K0BY-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8K0BY-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Andy Bruce LONDON (Reuters) \u2013 Investor confidence in British assets sits on the edge of a precipice as new finance minister Kwasi Kwarteng readies his first fiscal update, a<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1650209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1650209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1650209"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1650209\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1650209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1650209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1650209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}