Market News
What are bonds and why do they matter? - YAHOO FINANCE
Bonds are loan-like debt instruments that governments and companies use to raise funds. They pay returns to investors in the form of yields, which are effectively interest rates on the debt.
Concerns of stubborn inflation have led to expectations that central banks will slow down their pace of interest rate cuts, keeping them higher for longer.
This has prompted a sharp sell-off in government bonds – known as gilts in the UK – pushing yields higher.
This means the cost of UK government borrowing has risen, sparking concerns that this will put pressure on chancellor Rachel Reeves to further raise taxes and cut public spending.
