Branch2 Intelligence
Borrowing bomb for Burnham: Debt, both public and private, is the enemy of stability, warns ALEX BRUMMER
Key takeaway
UK public debt trajectory is unsustainable despite fiscal rule claims, threatening gilt yields and SME borrowing costs.
- Step 11st-order: UK fiscal sustainability concerns intensify, pushing 10Y gilt yields higher.
- Step 22nd-order: Higher gilt yields transmit to SME lending rates via bank funding costs and credit spreads.
- Step 33rd-order: SMEs face higher financing costs and reduced demand from public-sector austerity, compressing margins.
Source: This is Money
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