U.K. Politicians Fight First December Winter Election in Almost a Century By Bloomberg



(Bloomberg) — Across the length of the U.K., politicians are donning hiking boots and fluorescent jackets and arming themselves with torches as they campaign in the cold, wet and darkness ahead of the country’s first December election in almost a century.

The shrinking daylight hours mean much of the battle for votes will be conducted at night. The winter also brings the risk of snow and the sort of dramatic flooding that has already hit northern England and become a major issue in the campaign. All of that makes an already unpredictable Dec. 12 election more hazardous than any contest in recent years.

“We’ve got teams of people going out door-knocking every night,” said Alex Cole-Hamilton, election campaign director for the Scottish Liberal Democrats. “It’s about common-sense and putting safety first: look out for black ice, look out for each other in terms of low body temperatures. If your friend is starting to look blue, it’s maybe time to head homewards.”

There’s an open question about how the conditions affect the vote. The British love to complain about the weather and when irritation at discomfort turns into anger at a crisis, it’s the government that invariably gets the blame. Johnson’s Conservative campaign has already been knocked off course by disastrous flooding that has hit parts of northern England.

Fair Weather Voters

After opposition parties attacked the prime minister’s “woeful” response, Johnson sent in the army to help the relief operation. But on Wednesday, he faced anger from voters.

“What more can we do?” Johnson asked a local woman as he toured the flood-stricken area with reporters and television cameras in tow. “It’s a little bit too late now,” she replied.

Then there is the question of how wintry conditions could affect the number of people who turn out to vote on polling day. Turnout could be lower because of bad weather and early sunset times.

Transport could be snarled up, preventing voters from reaching the polls. Some voters may have taken an early winter holiday, while others could be out celebrating at office parties until after polling booths close at 10 p.m.

The timing may slightly benefit Boris Johnson’s Conservatives over the opposition Labour Party, according to Philip Cowley, professor of politics at Queen Mary University of London.

Tory Boost

“In recent elections, Labour have benefited from their mass membership giving them a ground war advantage that should, at least in part, be reduced by the weather,” Cowley wrote in a Spectator blog. “Postal voters also tend to be disproportionately older (and so Conservative), which might also benefit the Tories.”

And there’s also the question of where students will vote. They’re allowed to be registered both where they study and where they live. Most universities break up in the week of the Dec. 12 election, making it harder to predict where students will be.

If they’re concentrated in university towns, the more left-leaning student population could swing the vote more toward Labour or the Lib Dems in those constituencies than if they’re sprinkled around the country at their parents’ homes.

There’s no conclusive evidence that a winter election affects turnout. In the last December election, in 1923, 71.1% of eligible voters turned out. That compares with 77% in the October vote the following year. The last winter election was in February 1974, when turnout was more than 6 points higher than an October election later that year.

Dark Doorsteps

For most campaign teams, the main issues are the cold and the darkness that activists have to cope with when they are walking the streets to make their case to voters, door-to-door. In the Shetland Islands, off the far northern coast of Scotland, for example, there will be fewer than six hours of daylight on election day. Most of Scotland will get less than seven hours. And London will get just less than eight hours.

When the country went to the polls for the June 2017 election, London enjoyed more than 16 hours of daylight.

Andrew Bowie, the Conservative candidate who’s trying to defend his seat of West Aberdeenshire and Kincardine, said the sun will set before 3:30 p.m. in his constituency on Dec. 12. He points out that Johnson had tried to secure an election in September, but was thwarted by Parliament.

“Nobody wanted a winter election,” said Bowie, clad in a quilted jacket and hiking boots after a drizzly morning of campaigning in Stonehaven, south of Aberdeen. “December is possibly the worst possible time in this part of the world.”

Hats and Torches

Cole-Hamilton said his team have been collecting hats and gloves to ensure volunteers are prepared. In another Scottish seat, Conservative candidate Luke Graham said his team has been buying reflective jackets and head torches. He’s also concerned about voters being safe at home in the Ochil and South Perthshire seat he’s defending.

“People will be opening doors in the dark, and you want to make sure that the people they’re being greeted by are bona-fide party workers,” Graham said.

In St. Albans, a wealthy commuter city north of London, the Liberal Democrat candidate, Daisy Cooper, said her team has adjusted its canvassing strategy.

“Where you’re near the city center, there are more streetlights and people are willing to open their doors,” Cooper said. “That’s the kind of place you canvass until 8 p.m.” Further out of town, in villages where older people live, will be off limits. “We won’t be knocking on their doors in the dark,” Cooper said.

Both Cooper and Bowie said they’d been on a big drive to persuade their supporters to register for a postal vote. That’s important for ensuring people actually cast their ballots, because they may be deterred from heading out to polling stations on the day itself if there’s rain or snow. In 2017, 18% of voters cast their ballots through the mail.

There may be less daylight, but it’s not all gloom for the campaign teams.

“We’re trying to have fun with it too,” said Cole-Hamilton. “We’re starting to think about putting Christmas decorations up in our office for when December hits.”



Uber launches new safety features in UK as it fights for new license By Reuters



LONDON (Reuters) – Uber (NYSE:) launched a set of new safety features in Britain on Thursday as it battles to retain its taxi operating license in the face of concerns about passenger safety.

The measures include a discrimination button enabling drivers and riders to report abuse, enhanced safety training for drivers and a direct connection to the emergency services.

In September, Uber received only a two-month operating license in London, its most important European market, failing to secure a maximum five-year term in a battle with the regulator Transport for London (TfL) which has previously stripped the app of its right to take rides.

The two-month license came with “new conditions to ensure passenger safety” and TfL said at the time it wanted more details from the company.

In 2017, TfL rejected the Silicon Valley company’s license renewal request due to failings it said it found in its approach to reporting serious criminal offences and driver background checks. Uber was then granted a probationary 15-month license in 2018.

Drivers of London’s traditional black taxis have lobbied hard against a license renewal, citing safety issues, working standards and the undercutting of their business model.

Uber says its roughly 45,000 drivers in the city enjoy the flexibility of their work and that it has already taken several steps to improve safety for its passengers.

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Boris Johnson Asks Troops to Fight Floods as Weather Hits U.K. Ballot By Bloomberg



(Bloomberg) — Boris Johnson deployed extra troops to help flood-hit parts of Northern England as he tried to ensure that a natural disaster didn’t damage his election chances.

The prime minister convened a meeting of the government’s “Cobra” emergency committee on Tuesday evening, after opposition Labour Party Leader Jeremy Corbyn accused Johnson of failing to take the problem seriously. It agreed to request military support, and offered cash grants to affected areas.

Around 1,000 properties have been vacated in Yorkshire after two rivers burst their banks. The flooding shows the danger of Johnson’s decision to hold an election in winter, when cold, wet weather adds to the list of things that can go wrong for a government during an election campaign. Although only an extra 100 troops will be involved, their presence will deliver pictures that show the government taking action.

“In the next few weeks and months the rainfall could cause flooding in many parts of the country, and we simply have to be prepared,” Johnson said after the Cobra meeting. “I know there will be people who feel that that isn’t good enough. I know there will be people who are worrying about the damage to their homes, who will be worried about the insurance situation, worried about the losses they face. All I want to say to those people is that there are schemes to cover those losses.”

While the main Conservative attack line of the week has been that a Labour government would let public spending run out of control, the floods work well for the Labour argument that the Conservative focus on cutting spending over the last decade has hurt essential services, including the agencies that protect against flooding, and deal with its consequences.

One of the electoral districts most affected by the floods, Don Valley, is an example of the kind of seat Johnson aims to capture for his Conservative Party in the election: Labour-held, but strongly in favor of Brexit. Corbyn is using the floods to make the argument to voters there that the Tories don’t have their interests at heart. In a speech Tuesday morning, the Labour leader said that had the floods hit traditionally Conservative areas in the South of England, the response “would have been a very different story.”

That’s a narrative that Johnson can’t allow to run. in 2017, his predecessor, Theresa May, tried to win the same pro-Brexit seats that he’s aiming for. She was undone by plans to use the value of people’s houses to pay for their elderly care, something that repelled the voters she was trying to reach. Those around Johnson have said they won’t repeat her mistake, but if the government appears uncaring while people are flooded out of their homes, it could have the same effect.

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UK jobs fall by most in over four years as election nears By Reuters


© Reuters. FILE PHOTO: People walk through the Canary Wharf financial district of London

By William Schomberg and David Milliken

LONDON (Reuters) – Britain’s employers cut more jobs from July to September than in any quarter for four years, according to official data, which highlighted how the labour market is slowing as an election nears although the fall was smaller than economists forecast.

Strong jobs growth has been a silver lining of the Brexit crisis for British workers as companies hired staff rather than make longer-term commitments to investment.

The unemployment rate fell back to 3.8%, its lowest level since early 1975, the Office for National Statistics said.

But falls in the number of people in work, vacancies and the pace of wage growth added to signs of slowdown which prompted two Bank of England officials to vote for an interest rate cut last week.

“Granted, the employment data can be volatile, and the recent drop is being driven by part-time employment. But the drop … could be an early sign of a sharp softening in labour demand, and a broader turning point in the labour market,” HSBC economist Chris Hare said.

However Samuel Tombs, an economist at consultancy Pantheon Macroeconomics, said the softening appeared gradual enough for the Bank of England to steer clear of any rate cut for now.

Sterling rose slightly after the figures were published.

The ONS said the number of people in employment fell by 58,000 to 32.753 million, less severe than the median forecast of a fall of 94,000 in a Reuters poll of economists.

But it represented the biggest decline since the three months to May 2015.

Total and basic pay both rose by 3.6%, weaker than all forecasts, although still comfortably above inflation.

Britain’s economy grew by a decade-low 1.0% in the 12 months to September, hit by U.S-China trade tensions and the approach of a now postponed Brexit deadline on Oct. 31.

Prime Minister Boris Johnson, seeking to break the Brexit impasse, has called an election for Dec. 12.

But many employers say the uncertainty is likely to continue even if Johnson wins the election as he must hammer out a new European Union trade deal before a deadline at the end of 2020.

Labour leader Jeremy Corbyn says he will renegotiate the Brexit divorce deal and call a new referendum.

The Brexit uncertainty has aggravated Britain’s weak productivity record.

Output per hour was flat in annual terms in the third quarter, an improvement from a 0.5% fall in the April-June period, the ONS said.

That measure of productivity has not grown since the second quarter of 2018, the longest such run in a decade.

Vacancies showed their biggest annual fall since the end of 2009 to 800,000.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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U.K. Avoids Recession But Ends Third Quarter on Weak Footing By Bloomberg


© Reuters. U.K. Avoids Recession But Ends Third Quarter on Weak Footing

(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify (NYSE:) or Pocket Cast.

Britain dodged a recession ahead of the now-postponed Oct. 31 Brexit deadline, providing an election boost for Prime Minister Boris Johnson.

The economy grew between July and September, avoiding a second straight quarter of contraction, the Office for National Statistics said on Monday. Still, the figures were weaker than expected and showed the economy had little momentum as it entered the fourth quarter.

Johnson is seeking a Conservative majority in a general election on Dec. 12 to push his Brexit deal through Parliament.

If he wins, Britain could be out of the European Union by the new deadline of Jan. 31. If he loses, Brexit could be delayed further, extending the uncertainty hanging over the economy, or the U.K. could see its most socialist government since the 1970s.

The rebound from the second quarter masked a fragile underlying picture, with GDP contracting in both August and September against a backdrop of Brexit uncertainty and slowing global growth.

It means the economy was losing strength as it entered a climatic year-end, explaining why two Bank of England official broke ranks to push for an interest-rate cut last week. The BOE expected an expansion of 0.4% in the quarter, in line with private-sector analysts.

Fragile Outlook

Economists expect growth to slow to 0.2% in the fourth quarter, with 2019 as a whole expanding just 1.2% — the slowest pace since the financial crisis a decade ago. The outlook for 2020 depends on both the election and progress in Brexit.

A breakdown of the latest data revealed a familiar pattern, with solid consumer and government spending offsetting weak business investment. Services and construction expanded, while manufacturing flat-lined, with only a rebound in car production preventing the sector from declining.

There was little evidence of Brexit hoarding, with inventories actually falling over the quarter. That knocked 0.4 percentage point off growth. By contrast, they added 1.4 points in the first quarter ahead of the initial March 29 deadline to leave the EU. An unwinding of those stockpiles contributed to downturn in the following three months.

The quarterly GDP increase was due entirely to a strong July, with output falling 0.2% in August and 0.1% in September. Overall GDP rose just 1% in the third quarter from a year earlier, the least since 2010.

Exports jumped in the quarter, leading to a sharp narrowing of the trade deficit. Net trade added 1.2 points to growth. However, the data have been volatile recently because of effect of stockpiling and flows of non-monetary gold.

©2019 Bloomberg L.P.

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UK economy dodges recession, but annual growth slowest since 2010 By Reuters


© Reuters. FILE PHOTO: Customers shop for fruit and vegetables inside a supermarket in London

By David Milliken and Andy Bruce

LONDON (Reuters) – Britain’s economy grew at its slowest annual pace in nearly a decade during the three months to September as the global slowdown and Brexit worries hit manufacturing and business investment, official figures showed on Monday.

While the economy dodged outright recession, the rebound in quarterly growth was smaller than expected.

Output fell in August and September – when Britain looked at risk of leaving the European Union without a transition deal.

A month before an early election, finance minister Sajid Javid hailed what he called “solid” growth figures, a view challenged by the opposition Labour Party.

“The fact that the government will be celebrating 0.1% growth in the last six months is a sign of how low their hopes and expectations for our economy are,” Labour’s top finance official John McDonnell said.

Economists said ongoing political uncertainty and a weak global backdrop could prompt the Bank of England to cut interest rates next year, even if Prime Minister Boris Johnson passes his Brexit deal before a new Jan. 31 deadline.

“Narrowly avoiding a recession is nothing to celebrate,” said Tej Parikh, economist at the Institute of Directors. “The UK economy has been in stop-start mode all year, with growth punctuated by the various Brexit deadlines.”

Annual gross domestic product growth fell to 1.0% in the third quarter from 1.3% in the April-June period, the Office for National Statistics said, its lowest since early 2010.

This was weaker than the euro zone, which grew by 1.1%.

The quarterly growth rate recovered to 0.3% after contracting 0.2% in the three months to June when businesses wrestled with an overhang of raw materials stockpiled before the original Brexit deadline in March.

But it was a weaker rebound than the 0.4% growth predicted by the BoE and private sector economists.

BOE RATE CUT?

Britain’s economy has lost momentum since the 2016 Brexit referendum, before which it typically grew more than 2% a year.

Last week the BoE nudged up its growth forecast for 2019 to 1.4% from 1.3%. This would be the same growth rate as last year and the weakest since the financial crisis. For 2020, the BoE expects a slowdown to 1.3%.

Two BoE policymakers voted to cut rates last week and others could follow if growth remains weak and uncertainty persists about the longer-term trade ties between Britain and the EU.

“The BoE forecasts an investment rebound if a Brexit deal removes no-deal risk but we think this is optimistic,” said Nancy Curtin, chief investment officer at Close Brothers.

Business investment held steady in the third quarter but dropped by 0.6% on the year, the ONS said.

Manufacturing output fell more than expected, down 0.4% on the quarter and 1.8% on the year.

Household spending, which has been more resilient than business investment, due to low unemployment and rising wages, rose by 0.4% on the quarter. Government spending grew by 0.3%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Cracks in UK labour market grow as demand for staff fades: REC By Reuters


© Reuters. Cracks in UK labour market grow as demand for staff fades: REC

LONDON (Reuters) – British employers’ demand for staff grew in October at the slowest rate in almost eight years, a survey showed on Friday, underlining suspicions at the Bank of England that the labour market may be losing its strength.

A monthly index of jobs vacancies from the Recruitment and Employment Confederation and accountants KPMG fell to 51.7 from 52.6 in September, its lowest level since January 2012.

On Thursday, two of the BoE’s nine interest-rate setters unexpectedly voted to cut interest rates, citing signs that the labour market – the bright spot of Britain’s economy since the Brexit vote – may now be on the turn.

Friday’s REC report – which is monitored by the BoE – showed permanent job placements fell for an eighth month running and at a faster rate than in September, chiming with official data which showed job creation waning ahead of the aborted October Brexit deadline.

James Stewart, vice chair at KPMG, said uncertainty around Brexit and a national election scheduled for Dec. 12 had dampened companies’ hiring plans.

“It’s not just businesses that are being cautious, however, and over October we’ve seen job-seekers become increasingly nervous about making a career change,” said James Stewart, vice chair at KPMG.

The survey showed starting salaries for permanent staff rose at a solid pace in October, albeit more slowly than in September.

In a new set of forecasts for the economy published on Thursday, the BoE said it thought pay growth in Britain – which recently hit a more than 10-year high – was likely to cool off a little in the coming year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Election Road to More U.K. Borrowing Puts Focus on Bond Spread By Bloomberg


(Bloomberg) — There are so many scenarios in U.K. politics now it’s hard for investors to know where to turn. With both main parties aiming to ramp up spending after next month’s election, a bond market spread is likely to widen no matter which side wins.

Whoever forms the next government, there is an increased risk of a swelling budget deficit that would be funded by extra borrowing in the bond market. That is likely to hurt gilts and widen their spread against interest-rate swaps.

If Boris Johnson’s ruling Conservatives win as polls suggest, they will look to end a decade of austerity. Victory for Jeremy Corbyn’s Labour party would open up the spending taps further and also risk capital flight that would widen this swap spread even more. Either way, investors would need to hedge against the possibility of a hung Parliament, where no side has a majority.

  • Interest-rate swaps, which exchange fixed-rate payments for floating rates, have many drivers pushing and pulling their spread against bonds. For example, a turn in global sentiment away from risky assets means a preference to own government bonds rather than a credit instrument such as a swap. Other factors could include Bank of England asset purchases, funding levels that determine the carry between the two products, and flows from pension funds and insurers.
  • Higher demand and a lack of supply has seen 30-year gilts outperform swaps in recent weeks, but the increase in issuance from government budget requirements could see gilts falling versus swaps, taking the spread back toward the 2019 summer lows of around minus 60 basis points.
  • Thursday’s vote split on interest rates at the BOE signaled a short-term easing bias that saw the 2s10s gilt curve steepen, as front-end yields fell on the BOE while long-end yields moved higher with global bonds as well as the expected incoming fiscal wave.
  • A majority government should create the potential for a BOE rate hike given the fiscal spending outlook and potentially less Brexit uncertainty. A hung Parliament that prolongs uncertainty and could rein in spending ambitions via a coalition government would instead see the swap spread narrow, which could be hedged with receiver options that would pay off on a rally in gilts.
  • NOTE: Tanvir Sandhu is a global fixed income and derivatives strategist who writes for Bloomberg. The observations he makes are his own and are not as investment advice

To contact the strategist on this story: Tanvir Sandhu in London at tsandhu17@bloomberg.net

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UK spending plans, Brexit paralysis put rating at risk: Moody’s By Reuters



By Paul Sandle and William Schomberg

LONDON (Reuters) – Moody’s warned on Friday it might cut its rating on Britain’s sovereign debt again, saying that neither of the main political parties in next month’s election was likely to tackle high borrowing levels which Brexit had made even harder to fix.

In a toughly worded statement, Moody’s said the fissures in Britain’s society and politics exposed by its still-unresolved decision to leave the European Union would be long-lasting.

“It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the UK will return once Brexit is no longer a contentious issue, however that is achieved,” the ratings agency said.

Moody’s said Britain’s 1.8 trillion pounds ($2.30 trillion) of public debt – more than 80% of annual economic output – risked rising again and the economy could be “more susceptible to shocks than previously assumed.”

Both of the main political parties have promised big spending increases ahead of next month’s election.

“In the current political climate, Moody’s sees no meaningful pressure for debt-reducing fiscal policies,” the ratings agency said.

Prime Minister Boris Johnson called the Dec. 12 election in an attempt to break the deadlock over how, and even if, the country should leave the EU, more than three years after the Brexit referendum.

Moody’s said the “increasing inertia and, at times, paralysis that has characterized the Brexit-era policymaking process” showed how the UK’s institutional framework has diminished.

Even once Britain was out of the EU, uncertainty would remain because of the “significant challenges” of reaching a future trade deal with the bloc, it said.

Any signs that Britain was unable to replicate the benefits of EU membership with trade deals in Europe and beyond would also be negative for the rating.

Moody’s, which stripped the country of its AAA rating in 2013 and downgraded it again in 2017, said it was lowering the outlook on Britain’s current Aa2 rating to negative from stable, meaning the rating could be cut again.

At Aa2, Britain is on the same level as France but below Germany’s AAA rating by Moody’s.

Moody’s said the government, after reducing a budget deficit which leapt to 10% of GDP in 2010, had been increasingly willing to “move the goalposts” on making further progress.

“Successive governments have announced large, permanent increases in public expenditures, most notably a large increase in spending on the National Health Service, outside the normal calendar for fiscal policy changes and without detailed policy plans,” it said.

Last month, ratings agency Standard & Poor’s said it would cut Britain’s AA credit rating if the country leaves the EU without a deal, and it, too, warned that Brexit indecision was causing government paralysis.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Global optimism, UK spending promises lift long gilt yields to three-month high By Reuters


© Reuters. Global optimism, UK spending promises lift long gilt yields to three-month high

By David Milliken

LONDON (Reuters) – British long-dated government bond yields rose to their highest in more than three months on Thursday as a global improvement in risk appetite and the prospect of big increases in public spending overshadowed a more dovish Bank of England.

Ten-year gilt yields () peaked at 0.814%, up around 9 basis points on the day and the highest since July 16, and 20- and 30-year yields gained a similar amount () ().

By contrast, two-year yields () barely budged — pinned down by an unexpected split vote at the Bank of England — and the two-year/10-year yield curve rose to its steepest since July 15 at 24 basis points.

The steepening yield curve reflected countervailing forces at play for different maturities of gilts.

Markets received a shock earlier in the day when two BoE policymakers unexpectedly voted to cut rates, and the majority said a rate cut could become necessary if Brexit uncertainty and a global slowdown did not ease.

One measure of interest rate expectations now prices in a two thirds chance of a quarter-point BoE rate cut by the end of next year, compared with just over half on Wednesday, pushing down on two-year and five-year gilt yields, which are already well below the BoE’s 0.75% Bank Rate.

But the broader tone in markets on Thursday was negative for fixed income assets, bolstered by increased optimism about a trade deal between the United States and China.

German 10-year Bunds , like their British counterparts, rose to their highest since mid-July.

And for longer-dated gilts, there was added upward pressure on yields from the second day of Britain’s election campaign, in which both the Conservative Party and the Labour opposition promised big increases in spending if they win the Dec. 12 vote.

The fiscal news was “arguably more significant” for gilts than the BoE decision, Capital Economics analyst Oliver Allan wrote in a note to clients.

Labour’s would-be finance minister, John McDonnell, promised an extra 150 billion pounds ($192 billion) of infrastructure spending during the next five years, on top of 250 billion pounds he has already promised for the coming decade.

McDonnell’s Conservative counterpart, Sajid Javid, said he would spend an extra 100 billion pounds.

Both plans would require a significant increase in gilt issuance over the medium term, and could push up inflation or BoE rates if the spending hits the economy at a time when it is close to full capacity.

However, Capital said it expected the increase in British yields to be limited as any significant rise would attract foreign investors at a time when yields on much euro zone debt are below zero.

“Although UK yields are low historically, they are not particularly low relative to those elsewhere in the developed world,” Allen said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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