Allianz and Royal London Buy Gilts Amid UK Political Shift
Major investment firms are betting that the memory of the 2022 bond market rout will force any potential successor to Keir Starmer to maintain fiscal discipline. Despite rising yields following Labour local election losses, fund managers believe bond vigilantes will prevent a return to unfunded spending plans.
Allianz SE and Royal London are increasing bets on British government debt, wagering that political rivals to Prime Minister Keir Starmer will avoid fiscal recklessness. The move follows a sell-off in the United Kingdom bond market after the Labour Party suffered sweeping losses in local elections, throwing Starmer's future into doubt. Investors believe the memory of the 2022 gilt market collapse will force any future leader to maintain tight spending controls.
