U.K. Fiscal Concerns Rise as Government Borrowing Costs Climb -- Market Talk

Dow Jones03-23

1115 GMT - Investors are worried about U.K. public finances as they price in a risk of higher interest rates from the Bank of England and higher gilt yields, Morgan Stanley's Fabio Bassanin and Luca Salford say in a note. Elevated energy prices have revived inflation concerns and raised prospects of BOE rate hikes. There is also a possibility of U.K. government support to reduce household energy bills, adding to fiscal concerns, the strategists say. "We are concerned that investors may be starting to price in the risk of a ratcheting-up in fiscal support, as happened in 2022, when fiscal measures also began in a 'limited and targeted' manner but eventually amounted to around 3% of GDP," they say. (miriam.mukuru@wsj.com)

(END) Dow Jones Newswires

March 23, 2026 07:15 ET (11:15 GMT)

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