Markets are on high alert, with these bonds in the eye of the storm following the spread of some rumors.
Global stocks held their ground today, Friday, November 14, 2025, due to a combination of factors that also included concerns about renewed selling pressure on certain government bonds. Specifically, UK government bonds (‘Gilts’) saw their yields surge in the early hours of the trading day.
10-year UK Gilts came under selling pressure, causing yields to jump 7 basis points to 4.50%, in the wake of rumors related to the budget bill being drafted by the Starmer government, specifically Chancellor of the Exchequer Rachel Reeves.
Even stronger selling hit 30-year Gilts, with yields soaring 12 basis points.
Yields on 20-year government bonds also soared by 12 basis points, also coming under pressure. As a result, 20-year yields jumped to 5.225%.
UK, Rachel Reeves no longer raising taxes? Bond vigilantes trigger a broad-based sell-off
According to some rumors, Rachel Reeves no longer intends to raise taxes to restore the UK’s public finances.
The statement immediately sparked a fierce attack from so-called bond vigilantes, investors who base their investment decisions on whether or not a country is willing to get its finances back on track.
This is certainly not the first time that Gilts have been under scrutiny, due to fears about the UK’s real commitment to reducing its deficit and debt.
Selling in UK government bonds emerged immediately this morning following the publication last night of a Financial Times article, which reported that Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves had scrapped their originally planned, and undoubtedly unpopular, plan to raise taxes on British citizens. This plan was designed to fill the £30 billion hole in the government budget.
Starmer and Reeves’ about-face reportedly came in the wake of both fears of unleashing the wrath of the electorate that brought Labour back to power, as well as some MPs belonging to the party.
The discounting of 10-year Gilts was thus immediate, causing 10-year yields to soar to 4.54% in the early hours of today’s trading. And it certainly wasn’t the first time, due to suspicions about the Starmer government’s real intention to clean up its finances, that British government bonds hit by heavy sell-offs have been plunged into a new market where traditional safe-asset rankings have been upended.
Not just bonds, investors are also targeting the pound and the London Stock Exchange
The heavy selling, the Financial Times noted, was shaping up to be the most severe since the sell-off that hit British bonds in early July, when Reeves’ comments raised several concerns in the markets about the solidity of her position.
The pound also came under pressure, falling as much as 0.5% against the US dollar to $1.312, testing its lowest level in more than two years against the euro.
The UK currency later pared its losses.
UK stocks are also in the spotlight, with the FTSE 100 proving to be the worst performer in an otherwise broadly weaker European market, losing more than 1%.
The economist: Starmer government’s credibility at risk without tax hikes
Lee Hardman, senior economist in MUFG’s forex division, commented on the pound’s initial reaction, battered by selling:
"This is a signal that the (Starmer) government’s fiscal tightening plans are seen as less credible by market participants, without a tax hike."
In fact, Hardman continued, "the decision to forgo tax hikes could be interpreted as the Labour leadership’s desire to prioritize popularity among the electorate and the stability of the Labour Party, over what is needed to best restore confidence in the public finances."
The economist added that, in any case, "we still expect the fiscal tightening package to dampen UK GDP growth, putting increased pressure on the Bank of England to cut rates further."
Hardman also noted that "this week’s release of weaker UK labor market and GDP data has reinforced short-term negative sentiment toward the pound."
Original article published on Money.it Italy 2025-11-14 09:53:37. Original title: Alert sui mercati, questi bond finiscono sotto attacco
