Latest news with #UKGilts
Daily Mail
17 hours ago
- Business
- Daily Mail
Roller-coaster week sends UK yields higher
UK borrowing costs have seen their first weekly rise since May after a 'rollercoaster' ride sparked by growing fears about Labour's handling of the public finances. Ten-year borrowing costs shot close to 4.7 per cent on Wednesday after a tearful House of Commons appearance by Chancellor Rachel Reeves sparked doubts about her future. And though the moves in UK bonds – known as gilts – were mainly reversed in the following days as the Prime Minister backed Reeves, the episode added to worries sparked by the Government's humiliating climbdown on welfare reforms on Tuesday. Yields last night ended the week at 4.56 per cent, up from 4.5 per cent the previous Friday. It was the first weekly increase after a steady run of declines since mid-May. That partly reflected global moves as US bond yields turned higher thanks to worries about America's ballooning debt and trade tariffs. Nevertheless, it will pile further pressure on the beleaguered Chancellor as the increased borrowing costs will make it even harder to balance the books. Oliver Faizallah, head of fixed income research at wealth advisers Charles Stanley, said: 'This week's blowout was a reminder that the gilt market will not take kindly to excess borrowing.' Yields on UK ten-year bonds, known as gilts, began the week at around 4.5 per cent and eased close to 4.4 per cent ahead of the welfare vote in Parliament on Tuesday night – when it seemed Labour would manage largely to push through its plans. But last-minute concessions that helped the Government win the vote wiped out the intended savings. That blew a £5billion hole in the Chancellor's plans and sending yields racing towards 4.5 per cent the next day, before they climbed even further after Reeves' Commons appearance. It added to the damage to public finances caused by a previous U-turn on winter fuel payments, a deteriorating growth outlook and an increased commitment to defence spending. Andrew Goodwin, of Oxford Economics, said the volatility in gilts 'emphasises the need for fiscal discipline'. The sharp rise in yields reflected anxiety in the markets that, despite the Labour Chancellor's dismal economic record so far, her successor might prove even more of a worry by loosening the Government's commitment to balancing the books. Instead, ministers will need to try to find the missing billions elsewhere. Goodwin said: 'The experience will have demonstrated to the Government that markets will likely look unfavourably on any further loosening of the fiscal rules, increasing the chances that we see large tax rises in the Budget this autumn.'
Yahoo
2 days ago
- Business
- Yahoo
Borrowing costs surge on speculation over Reeves's future
Borrowing costs have surged and the pound has plunged amid speculation over the Chancellor's future. UK gilt yields rocketed higher on bond markets as Sir Keir Starmer initially failed to repeat a guarantee that Rachel Reeves would remain in her role for the whole of Labour's first term in power. The yield on 10-year gilts – the return the Government promises to buyers of its debt – shot up by as much as 18 basis points, rising above 4.6pc after Ms Reeves was seen crying in the Commons during Prime Minister's Questions. Thirty-year borrowing costs climbed by even more, up 22 basis points. Both were among the biggest one-day moves since the aftermath of Liz Truss's ill-fated mini-Budget. Downing Street later insisted that she had Sir Keir's full backing. A spokesman for Ms Reeves said that the Chancellor was going through a personal matter. However, borrowing costs remained elevated, while the value of the pound dropped as much as 1.1pc against the dollar to $1.36 despite the surge in bond yields, an unusual market move that indicates concern about the future of the public finances. Kathleen Brooks, of XTB, a trading platform, said: 'The market is pricing in the possibility of a replacement chancellor with a more Left-leaning agenda, which is spooking the bond market and waking up the bond vigilantes from their slumber.' It came after the Prime Minister effectively gutted plans for benefit reforms in order to avoid an embarrassing defeat in the House of Commons on Tuesday. Sir Keir still faced a significant rebellion from within his own party on the passage of the welfare bill. The watering down of welfare reforms has blown a £5bn hole in Ms Reeves's Budget, in addition to a £1.5bn shortfall created by the earlier about-turn on winter fuel payments. Economists said a tax raid in the autumn was now almost certain. However, the collapse of party discipline within Labour has raised concerns that the Government may not be able to tackle problems with Britain's public finances. Experts have warned that state spending is on an unsustainable path as a result of surging sickness benefit payments. Neil Mehta, of RBC BlueBay Asset Management, said: 'Last night's parliamentary chaos underscores the Government's waning control over public spending. 'The Chancellor's October Budget has already increased 2025/26 public spending by nearly £100bn compared to the previous government's plans, leading to higher borrowing and worsening inflation. 'A fiscal crisis now appears to be on the horizon unless tough decisions (such as tax rises) are enacted.' Mr Mehta said investors 'will be on high alert over the next months'. Matthew Amis, at fund manager Aberdeen, said: 'The market still believes that the fiscal rules are paramount, and inevitably that means tax hikes are coming. Any perceived watering down of those fiscal rules will see a gilt market reaction.' It came as the embattled Chancellor was warned that further rises in employer National Insurance would 'substantially' increase bankruptcies. Jonathan Steenberg, chief economist at credit insurer Coface, said: 'It is a tough tax on companies because it goes straight down to the cost level. We would have to raise our forecasts for insolvencies again. We would expect more insolvencies in 2026.' Ms Reeves faces a shortfall of as much as £32bn against her fiscal rules ahead of the autumn Budget, according to Deutsche Bank. Mr Steenberg warned that if Ms Reeves concentrated most or all of the shortfall on businesses, there would be 'substantially more' companies failing. The number of insolvencies in England and Wales in the first five months of the year was similar to in 2023 when they reached a 30-year-high, according to the Insolvency Service. UK borrowing costs climbed at a faster pace than even the US, where investors were digesting the Senate's approval of President Trump's tax cutting plans. US Treasury yields rose to 4.28pc after vice president JD Vance used his casting vote to secure passage of the 'One, Big Beautiful Bill', which is expected to add $3.3 trillion (£2.4 trillion) to America's federal deficit if it makes it through the House of Representatives. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Bloomberg
2 days ago
- Business
- Bloomberg
Julian Harris: Charts to Cheer up the Chancellor
A picture is worth a thousand words, as they say. Here at Bloomberg we prefer to think that a chart is worth a thousand words, so allow me to present today's long read: For the uninitiated, it shows the yield on 30-year UK government bonds (known as gilts) and arguably tells the whole story of the chaotic last 48 hours that the Labour government inflicted on itself. Yesterday's jump, as you presumably know by now, was triggered by Keir Starmer's failure to sufficiently endorse a clearly emotional Rachel Reeves while she sat behind him, struggling to hold back tears.
Yahoo
12-06-2025
- Business
- Yahoo
HOOD's May 2025 DARTs Rise Y/Y: Is Product Expansion a Catalyst?
Robinhood Markets, Inc. HOOD has released the monthly operating data for May 2025. It reported a rise in equity, options, and crypto Daily Average Revenue Trades (DARTs) from the year-ago period. The data excludes Bitstamp, which was acquired on June 2, DARTs in May were 2.3 million, which increased 15% from the prior year quarter. Options DARTs rose 50% year over year to 1.2 million. Crypto DARTs increased 66.7% from the prior year quarter to 0.5 reflects Robinhood's efforts to become a leader in the active trader market through strengthening its market share. The company has been diversifying its offerings to capitalize on investor demands. HOOD has launched several initiatives to attract more clients and strengthen its market share. Last month, it launched Robinhood Legend in the U.K. In March 2025, the company introduced Robinhood Strategies, Robinhood Banking, and Robinhood Cortex to boost wealth management offerings and the prediction markets hub. Also, in February 2025, it launched options trading in the U.K, while in January, the company launched Futures. In October 2024, the company launched Index Options and Robinhood Legend to focus on web traders. In March 2024, it launched the Robinhood Gold Card for its Robinhood Gold customers, venturing into the credit card rapid product innovation through vertical integration will likely continue to expand the company's client base, enabling an improvement in transaction-based revenues. The metric witnessed a compound annual growth rate (CAGR) of 36.7% over the last five years ended 2024, primarily driven by options and equities trading. The uptrend continued in the first quarter of 2025. Image Source: Robinhood Markets Inc. HOOD's key competitors, Interactive Brokers IBKR and TradeWeb Markets Inc. TW, have been rolling out products to bolster their market Brokers also witnessed a rise in May 2025 DARTs on a year-over-year basis, attributed to its evolving product suite. Last month, Interactive Brokers extended the trading hours for Forecast Contracts to about 24 hours a day. Further, in April, it added two new cryptocurrency tokens to its trading launched electronic portfolio trading for European government bonds, spanning UK Gilts, EUR, and single currency notes. Tradeweb was also the first platform to launch portfolio trading for corporate bonds in 2019. Shares of Robinhood have jumped 101% so far this year compared with the industry's growth of 9.4%. Image Source: Zacks Investment Research From a valuation standpoint, HOOD trades at a forward price-to-earnings ratio of 56.09, well above the industry. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Robinhood's 2025 and 2026 earnings indicates year-over-year growth of 12.8% and 21.3%, respectively. Over the past week, earnings estimates for both years have been revised upward. Image Source: Zacks Investment Research Robinhood currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Tradeweb Markets Inc. (TW) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
