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PIMCO CIO says UK market chaos not systemic but will have global impact
Global Banking & Finance Review®
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(Corrects name of conference to Delivering Alpha in first paragraph)
(Corrects name of conference to Delivering Alpha in first paragraph)
WASHINGTON (Reuters) – The collapse of the British pound and subsequent sell off in the country’s bond market in recent days do not pose systemic risks but will affect global markets, PIMCO chief investment officer Dan Ivascyn told the CNBC Delivering Alpha conference in New York.
Ivascyn added that the Bank of England’s decision overnight to prop up the bond market was a short-term fix that would not address waning investor confidence in British policy.
Since Friday’s UK mini-budget budget flagged 45 billion pounds ($48 billion) worth of unfunded tax cuts, sterling has lost 6% of its value and hit record lows while British bond prices soared. The chaos in a major developed economy adds to unease already generated by sharp interest rate rises from the United States and elsewhere.
(The story corrects name of conference to Delivering Alpha in the first paragraph)
(Reporting by Davide Barbuscia; writing by Michelle price)
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, managing monetary policy, and ensuring financial stability in the economy.
Currency hedging is a financial strategy used to protect against potential losses due to fluctuations in exchange rates, often involving derivatives or other financial instruments.
Investor confidence refers to the overall sentiment and optimism that investors have regarding the performance of the financial markets and the economy, influencing their investment decisions.
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