The U.K. is getting a new prime minister, but bond investors are really in charge and ‘hyper-reactive,’ Wall Street veteran says
Andy Burnham will become the United Kingdom's seventh prime minister in a decade, but the country's bond investors are expected to remain in charge, according to Wall Street veteran Ed Yardeni. The bond market's influence has been highlighted by the International Monetary Fund, which warned that foreign investors account for 60-90% of the variation in yields between 2020 and 2026, making the UK more vulnerable to volatile capital flows.
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"Ed Yardeni's assertion that bond investors will remain in charge is debatable, given the UK's relatively low level of foreign ownership compared to other developed economies. For instance, according to a 2020 report by the Bank of England, foreign investors hold around 30% of the UK's government bonds, which is significantly lower than the 60-90% cited by the IMF."