Gilts at a 28-year high as Bailey turns to the Budget

Gilts and a pre-Budget warning

Britain's borrowing costs were Thursday's main business. This is Money reported that UK borrowing costs had hit a fresh 28-year high. It also reported that Andrew Bailey, Governor of the Bank of England, had fired off a pre-Budget warning to the Chancellor over the bond markets. The Guardian covered the same episode with a different emphasis. In its account, the governor urged John Healey to use the Budget to allay market fears amid bond turmoil. Its report also pointed to medium-term government borrowing costs at a 19-year high.

City A.M. drew out the broader principle. Its headline carried Mr Bailey's view that governments must help control inflation too.

Britain was not alone in this. On Wednesday the Wall Street Journal reported that US stocks fell as Treasury yields tested multidecade highs. A separate WSJ piece asked why the battered bond market was finally getting a reprieve. The paper also ran two longer pieces on bond strategy, one framed around a world of rising yields and the other around today's high-yield world. Those are guides for readers and are not summarised here.

By Thursday evening the reprieve was partial. The Journal reported US Treasury yields retreating from their early highs, while eurozone yields remained elevated.

Oil, tankers and prices

Oil set the tone for equities. The WSJ's live coverage on Thursday morning carried the headline that oil was rising and the Nasdaq slipping on a fresh tanker attack. By the close, the paper reported US stocks mixed, with oil spiking and doubts over AI profits weighing on technology shares. Overnight, the Nikkei fell 1.1 per cent, dragged by chip and metals stocks.

Friday morning brought a different mood in London. City A.M.'s FTSE 100 live coverage said stocks were set to rise as oil fell back after President Trump's pledge on the Iran war.

The Middle East conflict also surfaced in company results. Tesco narrowed its profit outlook, according to This is Money, as shoppers shrugged off the 'uncertainty' the conflict had driven. Separately, City A.M. reported the grocer urging Mr Healey to slash business rates, which it described as 'fundamentally unfair'.

Inflation data from the United States added another layer. On Wednesday, CNBC reported that the one-year inflation outlook in a Fed survey had reached its highest level since May 2023. A day later the network carried a New York Fed finding that inflation on many everyday items was entirely due to tariffs.

One casualty of the month surfaced late on Thursday. The WSJ reported that Arini, a hedge fund known for bold bets, had lost 16 per cent.

Chips, listings and the City

Samsung reported a record. Euronews put the profit at $80bn, a 783 per cent jump, and said the AI chip boom had also lifted sales at TSMC. The BBC gave the same $80bn figure. This is Money described a record £6bn profit on surging demand for memory chips. The reports' figures differ, and the material does not reconcile them.

The appetite for AI did not extend to every new issue. The BBC reported that an Nvidia-backed AI data centre firm had scrapped a landmark listing over market fears. In Asia, SCMP sources said Hong Kong's IPO boom was at risk as cornerstone backers got cold feet. SCMP also reported analysts' view that Hong Kong would face limited impact if the Fed curbed access to a US dollar funding facility.

In London, listings were on the Budget agenda too. This is Money reported that the boss of the London Stock Exchange had urged the Chancellor to 'take the handbrake off' and axe stamp duty on shares. Standard Life shares tumbled, City A.M. reported, after Aberdeen slashed its stake.

Regulation and pay rounded out the day. The FCA is eyeing a 90-day redemption rule on illiquid funds to end mass withdrawals. City A.M. also reported that thousands of Lifetime ISA savers had been hit with multiple withdrawal penalties. Across the Atlantic, This is Money said the top 20 Goldman Sachs executives were set to share £400m, one of Wall Street's biggest paydays.