
Kwasi Kwarteng’s mini-budget continues to spook investors
If government bond sales by pension funds are the fundamental cause of a potential systemic crisis that could hurt us all, as the Bank of England says, why are pension funds taking so little advantage of the Bank’s offer to buy £65 billion of the bonds? And why are bond prices still falling? It seems to me the only explanation for what is happening is that margin calls on pension funds’ liability-driven investments (LDIs) – or the trillion pounds of their debt that’s secured against UK government bonds – are not, in fact, the main cause of the spike in bond yields, or at least they are only a small
