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The sharpest sell-off of UK government debt

The sharpest sell-off of UK government debt | 07 September 2022

07 September 2022, GBP/USD

The sharpest sell-off of UK government debt

GBPUSD trading plan:

Bond markets greeted the arrival of Liz Truss as Britain's new prime minister with the sharpest sell-off of long-dated British government debt since the COVID-19 pandemic caused turmoil in global financial markets in March 2020. Markets honed in on the scale of extra debt issuance likely to be required if Truss goes ahead with reported plans to freeze household energy bills at broadly their current level, funded by government-backed loans to energy suppliers. The scheme could cost around 100 billion pounds with the situation, but the precise amount would depend on its duration, wholesale prices and market demand. Some 30 billion pounds of tax cuts and extra support for businesses hit by higher energy bills risk pushing total borrowing even higher.

Investment idea: sell 1.1510 and take profit 1.1433.

David Johnson
Analyst of «FreshForex» company
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