What could push up the cost of Mortgage Funds?
British government bonds took a fresh hit amid claims that the Treasury’s fractured finances bear uncomfortable similarities to those of Greece, Portugal and Spain.
The implied interest rate on the UK’s 10-year gilt jumped to 3.95 per cent after former International Monetary Fund chief economist Simon Johnson warned Britain could face ‘big trouble’ if it fails to rein in public borrowing. He lumped it in a list of shame occupied by a clutch of crisis-struck Southern European countries.
The gap between the UK Treasury’s cost of borrowing and that of the German government leaped to 0.8 per cent point, equal to recent record highs.
Source – Daily Mail
Justin Moy