Comment from Marc Devereaux, Head of Investment Consulting at financial services consultancy Broadstone, on the surge in gilt yields since the budget. |
“Yields are currently up c.10bps today, and although yields across Europe are also modestly higher there is definitely a UK specific impact going on. The 10 year yield is just off the 12 month high.“I think there has been more reaction as the impact from yesterday is digested. For example, the IFS now believe Reeves’ £25bn national insurance revenue boost will in practice be far less (c.£16bn) because of the impact of lower wage growth – which means more gilt issuance. The OBR put a ‘guesstimate’ on the structural impact on gilt yields from increased issuance, which they estimated would be 0.25% higher. The forecasts for the Bank of England base rate cuts have reduced due to the inflationary impact of yesterday’s package.
“Remember, the Bank of England is currently selling gilts at a rate of £100bn each year as part of QT. It feels like a situation that could get worse, but currently the budget doesn’t appear to have increased yields on a very dramatic scale yet, which of course, would be more concerning. Schemes should continue to monitor hedging levels, ensure they have clear collateral support in place (we may see cash calls resulting from higher yields), rebalance asset allocation where appropriate, and consider opportunities to de-risk where funding levels have benefited from the increase in yields. |
|
|
|
Pensions Data Science Actuary | ||
Offices UK wide, hybrid working - Negotiable |
Head of Pricing | ||
London - Negotiable |
Global Specialty Pricing Actuary | ||
London - £95,000 Per Annum |
Client-facing DC investment manager | ||
London / hybrid 3 dpw office-based - Negotiable |
Financial Risk Leader - Bermuda | ||
Bermuda - Negotiable |
Aylesbury Actuaries | ||
Aylesbury / hybrid 3dpw office-based - Negotiable |
Make an impact in protection pricing ... | ||
London / hybrid 2 days p/w office-based - Negotiable |
BPA Implementation Manager | ||
North / hybrid 50/50 - Negotiable |
Head of Reserving | ||
London - £160,000 Per Annum |
In-force Longevity Actuarial Analyst | ||
London / hybrid 2 dpw office-based - Negotiable |
Make a difference within reinsurance ... | ||
London / hybrid 2 dpw office-based - Negotiable |
Be at the cutting-edge of life & heal... | ||
London / hybrid 2 dpw office-based - Negotiable |
Longevity Pricing Analyst | ||
London / hybrid 2 dpw office-based - Negotiable |
Develop your career in life reinsuran... | ||
London / hybrid 2 dpw office-based - Negotiable |
Protection Pricing Actuary - Life Rei... | ||
London / hybrid 2 dpw office-based - Negotiable |
Life (Re)insurance Pricing Manager (P... | ||
London / hybrid 2 dpw office-based - Negotiable |
Take the lead: life & health reinsura... | ||
London / hybrid 2 dpw office-based - Negotiable |
Pricing Tools and Systems Developer | ||
London / hybrid 2 dpw office-based - Negotiable |
Longevity Pricing Actuary | ||
London / hybrid 2 dpw office-based - Negotiable |
Shape the future of longevity | ||
London / hybrid 2 dpw office-based - Negotiable |
Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.