THE TELEGRAPH: Investors react to warnings that debt-fuelled Budget will raise interest rates and hurt growth
UK borrowing costs have hit their highest levels in a year and stocks have tumbled amid growing concerns about Rachel Reeves’s borrowing plans.
Benchmark 10-year borrowing costs rose by almost 0.2 percentage points to 4.582pc on Thursday, as investors fretted about the Chancellor’s £32bn-a-year increase in borrowing. Analysts have highlighted it would not all be used to fund investment.
The pound also fell by a third of a percent against the dollar to $1.2922 and stocks slumped. The FTSE 250 index, which is made up mainly of domestic companies, fell by 1.4pc and the more internationally focused FTSE 100 was down by 0.80pc in afternoon trade.
The sell-off for British assets and the higher government borrowing costs came as investors reacted to warnings from economists that the Chancellor’s debt-fuelled Budget will leave the country vulnerable to changes in debt costs, put up interest rates and hurt growth. » | Szu Ping Chan, Economics Editor | Thursday, October 31, 2024
