NatWest's Bachra on Truss' Fiscal Policy Plans

The video discusses the impact of Liz Truss's spending plans on UK gilt yields, driven by shifts in the Bank of England's policies and inflation expectations. It explores the fiscal stimulus's role in market repricing and the potential borrowing needs to cap energy prices. The discussion extends to the long-term economic impact of the energy crisis, comparing it to NHS spending. Challenges in attracting foreign investment for gilts and the role of domestic buyers, particularly pension funds, are also examined.

What are the challenges associated with funding the proposed energy price cap?

How might the UK's current account deficit affect foreign investment in gilts?

What changes in demand for longer-dated gilts are anticipated in the coming years?