Britain sells government bonds for a record return … amid economic challenges

On Tuesday, Britain sold new government bonds for ten years, with a record value of 14 billion pounds (about 18.9 billion dollars), registering the highest return since 2008. The purchase requests exceeded 141 billion pounds, despite the decline in the pound against the dollar.

The bonds are due in October 2035 with a return of 4.75%, an increase of 8.25 basis points from the standard bonds, which is the highest return since the auction of 2008. Analysts indicate that this trend reflects strong confidence in the UK debt, but it imposes pressure on the budget and limits its financial flexibility. Britain suffers from the highest inflation rate between advanced economies, in addition to the high cost of government borrowing, which may compel Finance Minister Rachel Reeves to raise taxes to control the deficit in the next fall budget. Local investors constitute 60% of the demand for bonds, while the National Office for the Religion Management is heading to focus on short and medium -term versions, due to the high cost of long -term debt globally. Jessica Powli, CEO of the Office of Religion, confirmed that the strong reception of bonds reflects confidence Investors despite the challenges in the global markets, with the participation of major banks such as HSBC, JPMorgan, LLOYDS, Morgan Stanley, NatWest and UBS.