@henryfudgeofficial: Why are UK bond yields so high? Britain’s so-called “moron premium” might have far less to do with Liz Truss, Rachel Reeves or whichever politician you currently dislike than you think. For decades, Britain built its government bond market around defined-benefit pension funds. They were enormous natural buyers of long-dated and inflation-linked UK gilts because they needed those assets to match pension liabilities. Now those pension schemes are ageing, closing and buying far less long-duration government debt. At the same time, the Bank of England is shrinking its gilt holdings through quantitative tightening. The UK Government still needs to borrow enormous amounts of money, but its old price-insensitive buyers are disappearing. The replacement buyers, global asset managers, banks, hedge funds and overseas investors, care much more about price. And in the bond market, that means one thing. Higher yields. Britain may genuinely have a “moron premium”. But part of it could simply be 45 years of pension and government debt market plumbing finally sending us the bill. #ukeconomy #economics #bonds #macroeconomics #finance

Henry Fudge

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Tuesday 01 September 2026 15:18:47 GMT