The yield curve of UK government bonds is steep, as the market reassesses the outlook for fiscal policy.

Jin10 data reported on July 2, London’s Daiwa Capital Markets European Research Head Chris Scicluna stated that clearly, the market is reassessing the prospects of UK fiscal policy, leading to a significant steepening of the UK government bond yield curve. The House of Commons vote gives reason to rethink the potential outlook for public borrowing. The market has long realized that the government has deviated from its borrowing path and anticipates corrective measures in the budget, but if the market continues to move in today’s direction, the government may have to announce some news on the revenue side rather than cutting public spending. The Bank of England is clearly assessing QT and may end asset sales in the autumn.