Nearly 80% of the British long-term government bonds high has plunged
There are assets that have plunged more than Bitcoin. It is British long-term government bonds that have emerged as an ambush in the global financial market these days.
The Financial Times (FT) reported on the 11th (local time) that government bonds fell more severely than digital assets in an article titled “Bitcoin> British Government Bonds.”
According to FT, Bitcoin has fallen 67% since November last year. FT reported that Britain’s 50-year “linker,” which expires in 2073, has fallen 78.6% since it was issued on November 23 last year. FT pointed out that government bonds issued by the British government turned out to be worse assets than Bitcoin, which is called a bubble. FT also voiced self-help, saying, “I can’t believe we’re writing such an article.” They say they cannot believe that the price of long-term British government bonds, which have been recognized as representative safe assets, has fallen further than Bitcoin due to the recent plunge in the pound.
British Prime Minister Liz Truss, who is considered the cause of the chaos in the British financial market, said she would not cut public spending while cutting taxes. Prime Minister Truss said in a question-and-answer session (PMQ) of the House of Representatives on the 12th, “We will reduce our national debt in the medium term,” adding, “We will not cut public spending (to this end), but will use taxpayers’ money well instead.” He also reiterated that the tax cut, which caused financial market instability, would increase growth and lower inflation. The Institute of Finance (IFS) and investment bank Citi have diagnosed that the British government has to cut spending by 규모60 billion or raise taxes to maintain or reduce national debt.
There is also a growing voice of criticism within the ruling Conservative Party for Mr. Truss’s insistence. According to the Guardian, Rep. Julian Lewis of the Conservative Party asked if there were any measures against the people whose mortgage borrowing costs have increased. Robert Halpon said he had “spoiled the conservative values he had built up over the past decade.” “The atmosphere was like a funeral,” a Conservative lawmaker told the Guardian.
The financial market continued to be unstable on the same day. According to Reuters, the 10-year government bond rate once rose to 4.64 percent per year, the highest level since the 2008 financial crisis. Interest rates on 20-year and 30-year government bonds reached 5.1 percent annually during the day, the highest since 2002. The Wall Street Journal (WSJ) reported that the International Monetary Fund (IMF) urged governments to refrain from tax cuts and expanding government spending to curb steeply rising prices.
The British Treasury is attempting to blame the Bank of England (BOE), the central bank of the United Kingdom, for the market turmoil. Asked by a Sky News reporter about what will happen after the 14th when the government bond purchase program ends, Finance Minister Quoji Quateng replied, “This is a matter for BOE president.” BOE said the government bond purchase program to support pension funds will end on the 14th as scheduled.