UK Bond Yields Do Monster Spike, Pound Plunges as Bond Vigilantes Rise from Graves, Go after Government’s Fiscal Recklessness | Wolf Street

In the UK bond market, the bond vigilantes have come back to life with a vengeance after the new government announced a massive package of tax cuts for the rich (by scrapping the top income tax rate and cancelling an increase in corporate taxes, in the classic form of trickle-down economics) accompanied by a surge in spending due to very expensive energy subsidies for businesses and households. While inflation is already raging at around 10%.

The yield on the 10-year UK government bond (gilts) spiked by 44 basis points, to 4.28% at the moment, bringing the spike since Tuesday last week to 113 basis points, as bond prices plunged:

The one-year yield on UK gilts spiked by a monstrous 65 basis points today to 4.16% at the moment, bringing the spike that started on Tuesday to 121 basis points. These are huge gigantic multiday moves:

UK Bond Yields Do Monster Spike, Pound Plunges as Bond Vigilantes Rise from Graves, Go after Government’s Fiscal Recklessness | Wolf Street

Trickle down does not work, not unless you are into S & M.