Bond yields are soaring. The cost of debt, and very soon mortgages, is rising. And the government is getting nervous about how it is going to borrow the next ten or twenty billion.
This might sound like the opening of a one-year-on post-mortem of Liz Truss’s ill-fated mini-Budget (we have all been treated to those recently). But in fact, it is a description of what is happening right now across Europe. The eurozone is facing its Liz Truss moment, and the results are likely to be every bit as catastrophic.
Across Europe the bond markets are starting to look jittery. Over the last couple of days, the yield on ten-year Italian bonds has risen to 4.89 per cent, the highest level since 2013, while the spread against far safer German debt has reached its highest level since the banking crisis last March.
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