Sabri Ben, Simon Harvey, UK discussed on Marketplace with Kai Ryssdal


Okay, now on to the UK. At one point today, the yield on Britain's ten year bond, it's called the guilt, reached 4.282%. That's the highest it's been since 2008, and it means that it just got a lot more expensive for the UK government to borrow money. Meanwhile, like I mentioned at the top, the pound hit a record low against the dollar today. All said, investors suddenly are pulling their money out of Great Britain, marketplaces sabri Ben ashore reports. The price of British bonds fell more on Friday than it has ever fallen in a day in more than three decades. I've never seen investors really kind of push back on anything this aggressive. I mean, it's historic. Simon Harvey is head of analysis at monex Europe. This all erupted last week after the British government made a big announcement. It said it would help people with their soaring energy bills and cut taxes. Price tag, $225 billion. This is the question the markets are asking, how do you pay for this? Dan Hamilton is a senior fellow at the brookings institution. The answer? By extra borrowing. Extra borrowing at a time when interest rates are rising, making that extra expensive for the government. Hilaria masala is a senior economist with the conference board. She says, here's what investors are thinking. The outlook for growth has worsened, the budget that fits huge, interest rates are rising. So I'm less sure compared to a year ago, whether the government would be able to give my money back. So investors are not going to buy UK bonds unless they get paid more to do it. One reason bond yields have gone up so much. But it's more than just worries about debt. It's also anxiety over what amounts to schizophrenic economic policy. Andrew molinar is with Janice Henderson. The tax cuts act in completely the opposite direction to what the Bank of England is trying to achieve. There is a fear that tax cuts could fuel inflation. The Bank of England is trying to fight inflation by raising interest rates. Here's how Muhammad el Arian, chief economic adviser at Allianz, put it to the BBC. The image of driving the car with the Chancellor foot on the accelerator and the governor fought on the break. That is not a good way to drive the UK economy. The Bank of England could hit the brake harder, raise interest rates more and send the UK into a recession, or it

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