top of page
  • Writer's pictureEdward Ballsdon

The UK rollercoaster

(Published 25 Sep 2023)


  • Thanks to decades of loose monetary policy, economic leverage has substantially increased in the UK.

  • This was first apparent in the private sector, but then in the public sector post-GFC.

  • Private savings must entirely fund the government’s increasing deficit as well as refinance a portion of the BoE’s holdings, as the latter undertakes QT.

  • Money and Credit aggregates have declined significantly to multi year lows. Credit is contracting on a real basis.

  • The market is pricing tight and relatively unchanged monetary policy for the next 15 months.

  • There is a serious risk of the “crowding out effect” of private assets to finance and refinance government debt.

  • RPI is likely to stay uncomfortably high and sticky but could decline quickly if poor housing market trends continue – this is not priced into the inflation market.

  • Price sentiment has recovered substantially in bonds, but it is weakening in Cable – the key support level is identified.

  • Price sentiment in the FTSE100 is weakening – a key support level is identified.

22 views0 comments

Recent Posts

See All
bottom of page