According to British investment bank Barclays, governments want to sell a record amount of nearly 500 billion euros in bond loans in 2023. However, these sales are no longer supported by purchases from the European Central Bank (ECB). Previously, the European Central Bank did this as a measure to support the economy in the eurozone. In March last year, the central bank even decided to suppress interest rate hikes in the financial markets by significantly increasing the weekly rate of debt purchases. Recently, interest rates have been raised again to curb inflation.
In the United Kingdom, problems arose in the bond market at the end of September due to the failed budget plans of the then British Prime Minister Liz Truss. The British government wanted to borrow a lot of money for these plans, including tax cuts. As a result, the already high national debt threatens to rise sharply. Investors did not like the plans and demanded higher rewards for British government bonds, causing bond yields to skyrocket. The resulting panic in the bond markets forced the Bank of England to intervene. And it announced that it would buy bonds again to prevent a partial collapse of pension funds.
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