Summary

Mark Bathgate, Founder of Tweeddale Advisors, discussing why the UK continues to face recurring budget crises and gilt market instability. The call examined the UK’s unusually high sensitivity to rising interest rates, driven by the Bank of England’s QE structure and a large stock of inflation-linked debt. Bathgate explained how higher rates and inflation have sharply increased debt servicing costs, forcing repeated tax rises and spending pressures. He highlighted significant gilt rollover risks, weak private demand for government debt, and growing funding premiums versus peer sovereigns. The discussion also covered political constraints limiting fiscal reform, risks of further market volatility, and parallels with past sovereign stress episodes. Overall, the call provided a sobering assessment of the UK’s fiscal outlook and the structural challenges facing policymakers.

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