Former UK Prime Minister Liz Truss says bond rout could force emergency spending cuts
Former UK Prime Minister Liz Truss warns that rising global bond yields and mounting national debt could force governments to implement emergency spending cuts. She argues that current fiscal pressures, exacerbated by monetary debasement, threaten economic stability across major developed nations.
Why it matters
The warning highlights growing concerns over fiscal sustainability in major economies, which directly impacts the 'debasement trade' and the performance of alternative assets like Bitcoin and gold.
“Global bond yields are spiking due to mountains of debt and the U.K. is one of the worst examples, Truss said in an interview. “The Bank of England has printed money and debased the currency.”
The U.K. has experienced one of the sharpest increases in borrowing costs among major developed economies. The 10-year gilt yield has climbed above 5.2% and the 30-year yield is approaching 6%, up from 5.12% when Truss was in office in 2022.
Bond prices move in the opposite direction to yields, and the selloff is not confined to the UK. Yields have accelerated across the U.S., Japan, France and Germany, highlighting the increasingly global nature of the pressure from growing debt, inflation and fiscal sustainability.
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