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London, United Kingdom – March 26, 2025: British Rachel Reeves, London in March 26, 2025, London, United Kingdom Commons of Commons of Commons of the United Kingdom should read the Commons of Commons of Commons Szymanowicz / future publishing
Wiktor Szymanowicz | Future Publishing | Getty pictures
The British government is planning to increase public spending – but market audience warns the risk of proposal to further exaggerate the country’s $ 143 billion interest in the bond market.
British Finance Minister Rachel Reeves announced that the government will be on Wednesday billions of pounds injection Defense, health, infrastructure and other areas of the economy in the coming years. A day later, the official information showed the economy of England grew from 0.3% more than expected in April.
Financing of public spending In the absence of an economy that growsThe government is leaving two choices: Dial money with taxes or borrow more.
A road where he can borrow is the gardens, known as Gilts in the UK, to bring to the public market. By purchasing Gilts, investors can earn income with the revenues of the bond representing the investor’s return to investors.
Gilt productivity and prices are moving in opposite directions – therefore increasing prices gives a lower product and vice versa. This year, elegant products, investors have seen variable movements that are sensitive to geopolitical and macroeconomic instability.
Long-term debt costs of the UK government In January, he touched up to many decadesand productivity 20- and 30 years Gilts Continues to rise above 5%.
Official estimates indicate that the government is expected Spend more than £ 105 billion ($ 142.9 billion) paying interest About 9.4 billion TL from the National Debt in Fiscal 2025, 9.4 billion TL in the period last year, 9.4 billion TL compared to £ 111 billion in 2026.
The government did not meet the newly open expenses on Wednesday and the CNBC wanted to comment on where the money will come from. But in it Last year, autumn budgetReveves plan to borrow both taxes and borrowings. Minister of Finance after the budget unlucky The current labor government does not raise taxes during the office and saying the government should not “have to make a budget like this.”
Oxford Economist Andrew Goodwin said the Oxford economy could be forced to move forward with the UK government’s expenditure plans with NATO expenditure plans adjusted The target of defense expenses for Member States is up to 5% of GDP and once Turn on winter fuel payments for the elderly and Other possible welfare reforms included.
In addition, Goodwin said that the office of Britain’s budget responsibility will be caused by “unfavorable adjustments” in July, and the “unfavorable amendments” and higher.
“If there are recent financial market prices, the cost of service expenditures for debt services are higher than £ 2.5 billion ($ 3.4 billion) The expression of spring“Goodwin warned a note on Wednesday.
‘Very fragile situation’
Mel Stride, a British opposition government, said CNBC’s Squawk Box Europe said that questions on “large amounts of borrowing” will be increased in the financing of the government’s financial strategies.
“(Government) debt gives the results in terms of higher inflation in the UK … and therefore interest rates are higher,” he said. “This is an additional amount of service expenses in addition to the debt mountain, the service costs per year, this is twice as many times we have spent protection.”
“I fear that the general economy has declared and borrowing this government and hindering and hindering borrowing.”
The bride, Reives ‘almost,’ he said, the next budget announcement in the next budget will be forced to increase the tax again.
“We have ended when you received the tariffs of the world, especially in a very fragile situation,” he said.
RBC called Rufaro Chiriseri Rufaro Chirizeri for the British Islands, Rufaro Chiriseri, the Rufaro Chiriseri CNBC rose to CNBC called “small financial title at the risk”.
“This reduced headroom can create a snowball effect because investors will be able to hold a self-sufficient sale to the restoration of financial stability, because it may be irritable,” he said.
Iain Barnes, the General Investment officer in Netwealth, told CNBC on Thursday that the British’s financial fragility situation is limited to the maneuver. “
“The market knows that if the growth is disappointed, this year’s budget must hand over and borrow and borrow the expenditure plans,” Barnes said.
However, the director of investment experts defended the way to keep in investment, investment, monitoring services.
The UK’s Gilts Debt Management Department has coverage to change giving pitters – the government’s maturity and type – helps the government to control debt costs.
“C4% and 15 years + Gilts productivity in 1-10 annual Gilts is 5.2% of productivity, borrowing financing costs are covered,” he said.
However, Larusse said they estimate that interest-bearing payments for the British government can be loaded with 3.5% of the financial year of this fiscal year and the cargo could be loaded.
“This increase is gradually controlled by high interest rates, which is becoming higher coupons payments, and the high-level levels of public expenses,” he said.
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