Only four in ten UK households make a net contribution to the state
The richest households contribute £57k, the ninth decile £17k, and the eighth £11k. The poorest decile receives about £24k
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@Frencheconomics As long as the bonds expiring in the APF are replaced are refined by short-dated debt the impact on the gilt market should be muted as the banking sector will just swap the O/N reserves destroyed for new sub-5yr gilts. QT imho isn’t what is driving higher UK rates.
@ClausVistesen@julianHjessop The curve is pretty flat from 20yrs to 35yrs - nevertheless the duration risk you run dwarfs the incremental yield/roll that would dribble into your return every day. 30yr bonds are a law onto themselves and are more about supply/demand dynamics than about economics.
@julianHjessop This is fair. The move in the 10yr is more important but regardless of the smaller move there the level of the 10yr asks very uncomfortable questions fiscally. The move in the 30yr matters because it puts more pressure on the 10yr as 30yr debt is now seemingly not an easy option.
@julianHjessop@SteveBakerFRSA The article on the right sort of explains the fiscal problem on the left… can’t make even small changes to pension/benefit/health spending without howls of protests…
@benjaminbarnard@rcolvile When you do the sums reserves tiering or HMT not repaying realised QT losses are functionally very similar to just forcing the MPC to cut base rate. Feels like an invasion of monetary policy independence.
@OneHotCode1@salr_nyc@saeedamenfx@donnelly_brent I enjoyed it more than the euro swaps curve inversion exotics blow up - buying great big clips of USDJPY felt more glamorous to my young self than scrambling around to give 5mm clips of 10s30s to whoever would take it.
@OneHotCode1@salr_nyc@saeedamenfx@donnelly_brent I had the joy of having to gamma hedge two PRDC books in London hours in my first trading job. It was definitely an abrupt lesson in second order risks.
I don't know do I. Lots get said that doesn't actually matter. But if I'm in a Labour MP run jng for reeelection in four years time and my opponent on the doorstep can just say "they sent £18bn to Mauritius instead of fixing that pothole" isn't it just isn't game over?