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    Global Banking & Finance Review® is a leading financial portal and online magazine offering News, Analysis, Opinion, Reviews, Interviews & Videos from the world of Banking, Finance, Business, Trading, Technology, Investing, Brokerage, Foreign Exchange, Tax & Legal, Islamic Finance, Asset & Wealth Management.
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    Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

    Top Stories

    Posted By Jessica Weisman-Pitts

    Posted on September 22, 2022

    Featured image for article about Top Stories

    LONDON (Reuters) – British government bond prices plunged on Thursday in their biggest daily drop since the COVID-19 meltdown of March 2020, reflecting global market moves and bond investors’ unease around the economic plans of Prime Minister Liz Truss.

    While it was a bad day for major government bond markets around the world following the U.S. Federal Reserve’s decision to hike interest rates by 75 basis points, investors targeted British debt for some of the heaviest selling.

    The Bank of England followed the Fed on Thursday with a smaller hike of 50 basis points, which failed to provide a lasting boost to sterling after it touched a new 37-year low of $1.1210 against the U.S. dollar.

    Gilt yields, which move inversely to the price, shot higher as a minority of three BoE rate-setters opted for a bigger 75 basis point rate hike, then peaked after the finance ministry confirmed it was reversing a recent increase in payroll tax.

    The potential scale of additional government borrowing implied by Truss’s plans has undermined investor confidence in gilts over the last month.

    Finance minister Kwasi Kwarteng is due to update parliament on tax cuts and plans to help households and businesses struggling with high energy costs on Friday.

    On Thursday the 10-year gilt yield topped 3.5% for the first time since April 2011 and as of 1530 GMT was up 20 bps on the day – the biggest such rise since March 2020, when the onset of the COVID-19 pandemic sparked market chaos.

    Marc Ostwald, chief economist at brokerage ADM Investor Services, said much of the sell-off in gilts reflected reaction to the Fed decision overnight.

    “But part of it is … also that we’re being drip-fed this fiscal event tomorrow. And it just keeps on looking like spend, spend, spend; borrow, borrow, borrow,” Ostwald said.

    A slim majority of bond strategists and economists in a Reuters poll published this week said there was a high risk confidence in British assets would deteriorate sharply in the coming three months.

    The gap between 10-year British and German benchmark bond yields touched 156.4 basis points on Thursday, the highest since 2015.

    Gilt yields rose by 19-20 bps across the range of maturities, with two- and five-year yields reaching their highest levels since late 2008.

    The 10-year gilt yield has risen 70 bps in September so far, following a 94 bps increase in August that had been the biggest in 36 years.

    Taking August and September thus far together, the increase in yield would be the largest since October and November 1979, according to Refinitiv data.

    (Reporting by Andy Bruce; Editing by Catherine Evans)

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