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Expensive Election Promises Could Torpedo the U.K. Bond Market
Politics in Britain has rarely been so divided, but its warring factions are increasingly united on one thing: fiscal largesse is coming. And that could torpedo the U.K.’s high-flying bond market. Gilts that are beating Treasuries and bunds this year suddenly look vulnerable to JPMorgan Asset Management, BlueBay Asset Management and Nikko Asset Management. The money managers cite election season promises that come with big spending plans by Tory incumbent Boris Johnson and his opponents, and the prospect of an economic recovery that will lift inflation. BlueBay and Nikko are taking short positions in the U.K. rate ... (full story)