A bond market meltdown on Tuesday caused the interest on on the U.K.’s 30-year gilt or bond to rise to a level not seen since 1998, sparking fears the UK will not be able to pay its debt, become insolvent or face hyperinflation, weakening the British pound and adding to the Treasury’s fiscal problems ahead of the Autumn Budget just as economists warn that more tax increases could shrink the economy in a death death sprial.
Economists have warned that Ms Reeves faces a fiscal black hole of as much as £50bn in the autumn. Meanwhile, growth remains weak.
In 2024/25, the Uk paid £124.7 billion interest on its 2.9 trillion of debt or about 10% of its tax receipts.
That is also about 5% of the value of all the goods and services produced in the UK in a year, known as the gross domestic product, or GDP.
That means that 5% of the value all British businesses, farms etc produce goes merely to pay the interest on debt resulting ultimately from the de facto private issuance of money by the government for the enrichment of private bankers.
We can calculate how many businesses in a shrinking economy of ever increasing taxation and inflation can afford to give 5% of their profits away and still survive, have money to invest, give pay raises etc.
The elite seem to believe they can not just extract every penny from the Brits, but also impose martial law. However, they may find they have sorely miscalculated and the end result is that the BRICS buy up what is left of the UK and put the elite on trial if the British public do not act first for their global covid and other crimes.
Michael Mross warns the UK s debt problems will also affect Germany, itself struggling with a debt crisis.
Die britische Regierung zahlt jetzt schon über 100 Milliarden Pfund jährlich an Zinsen. Sollte die Rendite auf 6 Prozent klettern, wächst die Last ins Unerträgliche. Schuldenlawine, schwächeres Pfund, höhere Inflation. Ein Kreislauf, der nicht nur die Insel, sondern auch Europa in Mitleidenschaft zieht. Das ist nicht länger ein Risiko am Horizont, es ist ein Sturm, der bereits tobt.
https://www.mmnews.de/wirtschaft/238830-gb-anleihen-crashen-boeses-omen-fuer-deutschland
https://en.wikipedia.org/wiki/Government_spending_in_the_United_Kingdom
From media
LONDON (Reuters) -Britain sold a record 14 billion pounds ($18.9 billion) of new 10-year government debt on Tuesday at the highest yield since 2008, after attracting more than 141 billion pounds in orders from investors despite sterling heading for its worst day since June.
The UK Debt Management Office sold the 4.75% October 2035 gilt with a yield of 4.8786%, a premium of 8.25 basis points over the 10-year benchmark gilt that launched with a then-record volume of 13 billion pounds in February.
Shortly before the sale started at 0730 GMT, sterling slumped by more than 1% against the U.S. dollar and 30-year gilt yields hit their highest since 1998, as investors looked warily ahead to the government's autumn budget plans.
Tuesday's gilt syndication represented the most issuance at a single event since the DMO began operations in 1998, but also the costliest 10-year borrowing since an auction in July 2008.
Gold prices could climb to almost $5,000 an ounce if Donald Trump continues to damage the independence of the US Federal Reserve and investors move holdings from the Treasury market into gold, according to Goldman Sachs.
“A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve-currency status,” analysts at the bank said in a note. “In contrast, gold is a store of value that doesn’t rely on institutional trust.”
Earlier this week the spot gold price hit a record of $3,578 an ounce and has been one of the strongest performing major commodities this year.
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