Alpesh B. Patel explains how government bond yields set borrowing costs across mortgages, corporate loans, and public spending. Higher yields reduce consumer spending and hiring. Confidence in government drives yields, and 52% of investors expect the FTSE 100 to rise in the next year, mainly as a non-US diversifier.
to lend them money, there's an auction. And sometimes these other countries say, well, I want you to pay me more interest because I don't trust you. So if bond yields go up, the cost of borrowing increases, your mortgage might go up. So the consumer has less money. Corporate company borrowing goes up. So companies have less money to hire people. Worry. And governments have less money to spend because they're paying more interest debt. There's only 3 parts to an economy: consumer investment, corporate investment, government. Okay? Those 3 parts. And if they all get hit, and bond yields can hit all of them, you got a problem. So who can impact bond yields the most? Confidence in a government. That's how economics works, confidence. And at the moment, we're not worried. So don't worry, we're not worried. All right? I'm going to give you some insights on various things. JP Morgan event I was at for their private bank at the Oxford Forum, which was last month. So I'm going to give you insights from these things. I interviewed Lord Stockwood, the Minister for Investment from to our business, trade, and treasury. So any insights I get from either speaking to government or private banks, I'm going to share with you on these webinars and on my social media and the like. Okay. So I want you to know that 52% of you think the FTSE 100 will be higher in 12 months. You might be right. It's a diversifier against America, and therefore it's been popular for that reason. It's not popular because UK GDP is growing quarter on quarter. It isn't. It's popular because it's not America. So Britain has found a niche in that Okay, we've got in our stocks companies which aren't American stocks. And that's been a, you might say perverse, but in a way it's been good for Britain because it's found a niche, a role post-American tech hegemony, as it were, hegemony.
