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SOUTH EAST OCT _ NOV 2026

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Pulse Fromtheheart of thebusiness worl d SOUTHEAst

OCT-NOV2026

Business owners: your mental healthmatters too 1

Latest updates

Regional news

Business in focus


Inside this edition Click a headline to jump to an art icle

Feature Business owners: your mental health matters too

20

News Your Event Solutions moves forward as ALTOUR Freeze from the Bank of England as UK economy risks feeling the chill

10 34

Focus The autonomy paradox: how more work freedom can leave you feeling powerless

14

Why government debt is growing: public spending explained

38

Regional The British Bank invests £210m to unlock growth in SE England

6

Research: companies identify serious supply chain risks but few can manage them

29

Pulse

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Regional

Feat ure

Regional

New £210m invest ment fund launches to

access to finance for small and

unlock growt h in t he Sout h East of England

medium-sized businesses, offering loans from £25,000 to £2 million and equity

-

-

-

The British Business Bank launches £210m investment fund to unlock growth in the South East of England

£210m South East Investment Fund

investments of up to £5 million to help

launched to support small and

businesses start, scale and grow.

medium sized businesses

The Fund has already made its first

The Fund will offer a range of

investment with a £250,000 loan to

commercial finance options with

Basingstoke technology company Process

loans from £25,000 to £2m and equity

Vision, demonstrating early impact in the

investments of up to £5m

region. The funding is backing the company?s

Launch of the South East Investment

next phase of commercial growth and

Fund and forthcoming East of England

international expansion.

Investment Fund means the British

The South East of England is home to 17% of

Business Bank is now delivering

the UK?s university spinout businesses,

targeted finance across every UK

behind only London[1],while the region

Nation and region outside of London.

received 5% of the UK?s total equity

A new £210m Fund designed to support the

investment by value last year[2]. The launch

growth of small and medium sized

of the fund will help to ensure the bridge

businesses in the South East of England

between academic innovation and market

has been launched today by the British

deployment is adequately supported in

Business Bank.

the region.

Launch of the South East Investment Fund

David Hourican, Incoming Interim Chief

and forthcoming East of England Investment

Execut ive Officer of t he Brit ish Business

Fund later this month means the British

Bank, said, ?Today?s launch of The South East

Business Bank is now delivering targeted

England Investment Fund will help to

finance across every UK Nation and region

stimulate economic growththroughout the

outside of London.

region. The South East of England is home to

This supports the Government?s plan for

some of the UK?s most innovative

growth in every postcode by helping

technological and scientific businesses and

businesses access finance close to home. By

this fund will ensure that business have local

backing ambitious smaller businesses, the

access to the finance they need to grow, scale

fund aims to support innovation, create jobs

and expand.?

and stimulate sustained economic growth in

Business Secretary Jonat han Reynolds said:

the region.

?Small businesses are the bedrock of our

Covering Buckinghamshire, Oxfordshire,

economy and a vital part of any high street,

Berkshire, Hampshire and the Isle of Wight,

whether it?s a tech startup in Surrey or a

Sussex, Surrey and Kent, the South East

creative agency in Margate. Making sure that

Investment Fund will provide much-needed

smaller businesses have the backing they


News Regional

need to thrive is a crucial part of creating

leading me to consider all aspects of my

good growth in every postcode.

business from marketing strategy to sales

?We are determined not to let access to

prognoses and target audience. I was

investment be a barrier to success for

supported and clearly guided through all

businesses in the South East. The launch of

stages of the application process, and I

this fund will help to ensure that small

genuinely felt that all of the people I dealt

businesses across the South East can grow to

with were there to help me succeed.?

match their ambitions, whether that is

The South East Investment Fund will be

bringing in new staff, moving into a new base

managed by a team of fund managers

or scaling into an international company.?

appointed by the British Business Bank

Isis du Jour, Founder of Yoga Yurt , said: ?I am

including The FSE Group and Maven Capital

incredibly grateful for the support of British

Partners. The FSE Group will manage the

Business Bank which made it possible for me

debt finance part of the fund while Maven

to start my dream business. The whole

Capital Partners will manage equity

process was very detailed and informative,

investment through the fund.

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News Regional

Regional News

Your Event Solutions moves forward as ALTOUR After 25 years building one of the most

Together, these strengths enable ALTOUR to

By bringing strategy, sourcing, creative

incredibly proud of what we have built and

trusted specialist businesses in meetings

address a broader range of needs with

development, delivery and reconciliation

excited to see it grow further within ALTOUR,

and events, Your Event Solutions (YES) is

greater consistency, visibility and control.

into one framework, ALTOUR helps clients

opening up new possibilities for our clients

becoming ALTOUR. The transition brings

"YES earned its reputation over 25 years by

reduce fragmentation, strengthen

without losing the personal touch that has

together the expertise, creativity and

combining extraordinary creativity with deep

governance and improve visibility while

always defined YES."

relationships that have defined YES with

care for its clients. This is how we honor that

preserving local flexibility.

As YES celebrates its 25thanniversary, this

ALTOUR's award-winning business travel

legacy: not by replacing what YES has built,

Powering this model is ALTOUR iQ, ALTOUR's

next step honors the expertise, culture and

management services under one global

but by giving the same talented team a

connected intelligence and data analytics

client relationships the business has built

brand.

larger platform," said Gabe Rizzi, President of

platform, which brings event intake,

Hewitt / Shutterstock.com since its founding.John TheBHalifax office will

Effective today, YES will move forward as

ALTOUR.

approved budgets, delivery, reconciliation

remain a key part of ALTOUR's operations

ALTOUR, expanding the support available to

"ALTOUR is already trusted to manage

and experience analytics into one real-time

and the home of the people, culture and

clients, from managing complex corporate

complex global business travel programs.

view. This gives clients greater financial

expertise at the heart of YES's Yorkshire

travel programs to delivering every stage of

Bringing YES' fully under our brand broadens

oversight, a complete audit trail and a

heritage. Under ALTOUR, that legacy will

an event, including strategy, sourcing,

that partnership, giving clients one

clearer understanding of event impact.

continue as part of an expanded global

creative development, technology and

accountable global partner for how their

"When I founded YES 25 years ago, it was

offering that connects leading business

reconciliation. The name is evolving, but the

people travel, meet and connect ? with the

with a belief that extraordinary events begin

travel management with end-to-end

expertise, relationships and care behind it

scale, intelligence and creativity to turn

with understanding people ? their

meetings and events expertise. This broader

remain.

every interaction into measurable value.

ambitions, their brands and the moments

scope allows ALTOUR to support more of the

Clients will continue to benefit from the

Together, we can be as big as our clients

that matter to them," said Sue Gill, founder

needs surrounding every business

creativity and personal service associated

need us to be and as small and focused as

of YES. "That belief, and the care and

interaction ? from moving people around the

with YES, now backed by ALTOUR's global

they want us to be."

creativity our people bring to every client,

world to bringing them together with

remain at the heart of the business. I am

purpose.

reach, buying power and technology.

Guilherme Klein Martins Lecturer in Economics, University of Leeds


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Clive Roland Boddy Deputy Head, School of Management, Anglia Ruskin University

Words: Craig Sergeant ofAdvance Copy


Focus News

The autonomy paradox: how more freedom at work can leave you feeling powerless

You may know the feeling. You?re supposed

Research shows that workers with a high

to have finished work for the day, but later,

degree of autonomy struggle to leave work

during your evening meal, you start mentally

behind at the end of the day. When you have

preparing for tomorrow?s meeting. Or just

control over your job, it can stay on your

having a quick check of your emails while

mind as you run through decisions and

you half watch TV.

ponder unresolved problems. Switching off

You might not mean to, or even want to. It?s

becomes difficult.

just something that you end up doing as part

But the capacity to stop thinking about work

of the price of enjoying some autonomy at

during personal time, what?s known as

work.

?psychological detachment?, is a form of

For a while now, research has claimed that

emotional and cognitive recovery. Without it,

professional autonomy was a good thing.

resources are never fully replenished. The

Being able to decide how, where and when

person who cannot switch off does not just

you worked was considered a major plus in

feel tired ? they go back to work the next day

terms of motivation, job satisfaction and

already running on empty.

overall health.

Autonomy can make this detachment harder

And although those benefits still exist, we

precisely because of the sense of ownership

now know that more autonomy can often

it brings. Responsibility does not respect

also mean more work and less downtime.

working hours, and the person who controls their own job carries it home in a way that

By Andreana Drencheva Senior Lecturer in Entrepreneurship, King's College London


Focus

Focus News Regional

Rhyl?s biggest conversation starts now And £20m is on the table the person purely following instructions

but she could not stop. For her, the work and

Being seen less in the workplace can mean

And that problem cannot really be solved

does not.

the self had become the same thing ? the

having more to prove. In these situations,

with legislation. Things like the

Research my colleague and I conducted with

result of a working life in which she alone

some workers end up showing their

?right-to-disconnect? or flexible working

40 entrepreneurs ? people whose working

was responsible for every outcome. No

commitment by replying quickly, being

policies tend to address intrusions from

lives are especially autonomous ? reveals

changes to her evening routine could help

online late or taking on extra projects.

outside ? the manager who emails at 9pm, or

another problem arrives when your work and

her separate the two.

The shift to working from home and the

the meeting which clashes with the school

identity are entwined. When work becomes

Another told us that she felt guilty if she

technology which allows it, has brought a big

run.

bound up in who you are, detachment

separated her business from the rest of

change in what it means to stop working for

Laws can do nothing about the work

becomes virtually impossible.

her life.

the day.

pressures inside employees?own minds.

One woman in her 20s told us that she would

Working from everywhere

When work requires being in a specific place,

Because in many cases, organisations have

regularly lie awake at night, unable to stop

Separate research confirms that workers who

the end of the day has a physical logic to it.

not simply given workers more freedom, they

thinking about her work. She explained: ?I

have a high degree of autonomy over their

You leave that place

have also given the job of managing that

feel the pressure. I am still struggling with

schedules and tasks end up working more,

But for many that shift has gone and been

work onto the worker themselves.

[what it means] to be an entrepreneur.?

not less. When people have autonomy, they

replaced with constant availability.

While autonomy is still worth having, it often

?Sometimes, I feel I am not giving enough to

repay the trust with extra effort.

Being reachable shows commitment. Not

comes at a personal cost.

the company. Like [at] 11pm, should I just

This is especially the case in situations

being reachable requires explanation

It can mean less power and more work ?

work an extra hour and a half ??

where autonomy removes visibility, such as

and justification.

which is unacknowledged and unpaid.

She understood thatLecturer this was unsustainable, when Guilherme Klein Martins in Economics, University of Leedspeople work from home.


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Feat Feat ure ure

Business owners: your mental health matters too By Advance Copy


Feat ure News When we hear about mental health in the

Because everything is on you. Sure, it?s what

workplace, it?s usually about ways to support

you sign up for in this game, but even the

staff. Like how you need to take it seriously,

most driven person has to admit: it?s a lot,

to follow proper policies and procedures,

isn?t it?

and to help your people through their issues

All that pressure. Long days. Short sleeps.

as best you can.

And you can add home and family life into

But what about you, the small business

the mix, too.

owner? Who?s there for you and your mental

Whether you?re starting your business or

health? Who?s giving you support and

growing it, nothing seems to let up. It?s

advice?

always more, more, more... and then some

After all, you?re clearly not the kind of boss

more. That?s the life of an entrepreneur.

who sits out of sight of your team, twiddling

When you think about it, it?s pretty amazing

your thumbs while everyone else gets on

what you can achieve, isn?t it? But that

with the work (and if you are, please let us

doesn?t mean it?s easy. And it doesn?t mean

know how you?ve managed that). No, you

that it comes without consequences.

wear many hats. You?re the HR department. You manage the finances. You?re marketing,

Survey

research and development. You?re many

According to Simply Business in

roles and more to keep your business not

collaboration with Mental Health at Work (a

just going ? but improving. And if something

programme by the charity Mind), 56% of

goes wrong?

small business owners said they?ve had poor

You better believe that?s on you.

mental health at some point over the


Feat ure News Feat ure

Feat ure

previous year. The biggest issues they

needs time to be restored. When it doesn?t,

turning it around.

up control, taking on the bulk of the work

reported include anxiety (59%), financial

it?s not just mentally taxing, it hurts you

On the other hand, you could hit a wall and

and feeling like anything important is their

worries (41%), depression (38%) and

physically. And that?s burnout.

suddenly find yourself unable to get out of

priority. But if you only delegate the ?easy?

loneliness (22%).

Burnout

bed for days on end, foggy brained and

jobs or the ones you like to your team, that

It seems like the weight of responsibility as

heavy bodied, as your body shuts down and

leaves you with all the stress-causing tasks.

Burnout is difficult to describe. But if you?ve

a business owner is the major cause of those

forces you to rest and recover whether you

And if someone in your team has a problem,

had it, you know it. The way it affects people

problems, working far more hours than

have time for it or not. And there are

who?s it then on to sort that out?

is different from person to person, but it?s a

anyone else ? way above the national

a host of other possible ways burnout can

You, of course.

form of chronic stress that takes hold over

average ? yet taking fewer days?annual

extended periods. You might not even notice

affect you.

That?s a case of building a team with

leave. In fact, 73% of respondents said

you?re experiencing it. For example, as an

Which is why for business owners like you,

responsibility but with no authority. Then,

they?ve haven?t even taken 20 days off (some

entrepreneur, you may be used to pushing

it?s important to recognise stresses early and

it?s on you to coach the team to be able to

Americans reading may shrug their shoulder

forward, working hard, skipping weekends

fix the root causes now, rather than try to

do the work properly. It might feel easier to

at that one).

and holidays, but gradually, a form of

treat the serious mental and physical

either give them the solutions or think, ?I?ll

Even if you?re someone who thrives from

detachment from your work may drift in. So,

symptoms later.

just do it myself,? but doing so adds to your

being ?on the go?all the time, energy isn?t an

you?re doing the work while also being

Cont rol

endless resource. It gets depleted, and it

absent and feeling tired with no way of

mental capacity, which could be close to or Business owners often find it difficult to give

over its limit. It?s easy for staff to fall into a state of ?learned helplessness?where they


Feat ure Regional

Regional

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rely on their boss ? that is, you ? to fix

burnt out.

everything. That?s not the way it should be.

St ress

So instead, it?s guiding the team to find the solutions to problems themselves, freeing you up for a more focused, manageable workload.

It seems that the UK is a stressed workforce. For those who are well into their careers, it?s frustrating to work in an economy that has stagnated since pretty much the 2008

Of course, that?s just one example of a

financial crash. It seems like there is more

limitless number of scenarios you might

work to do than ever, but without the wages

face, and while it might sound obvious, it?s

to reflect that ? plateauing as costs rise and

always important to remember to set

rise with inflation. As Pulse covered in the

boundaries by learning to say no. Rember to

last edition, that seems likely to get worse.

delegate, delegate, and delegate some more.

Much worse.

Outsource if you need expert support. And take breaks and holidays ? your body and mind (and business) will thank you for it.

And then there are those at the start of their careers. In 2024, the BBC reported that for the first time ever, more younger people

By Advance Copy

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than older people were out of work due to


Regional

Feat ure

New research finds companies are identifying serious supply chain risks but few can show that they manage them their mental health.

levels), but the UK?s stagnating wages, living

Meanwhile, the climate today for those who

standards and rising costs make things feel

are looking for a job is dismal. There is

worse than before. But humans have never

currently little demand for employers to take

had to face the levels of information and

on the least-skilled levels of staff to train

stimulation we have now through the

them up. Plus, the recent increase in

internet and social media, which are

minimum wage for 18-20s as well as

designed to keep users hooked

employer?s national insurance have both

through spiking our cortisol ? AKA the

raised the cost of hiring, especially in

stress hormone.

sectors like hospitality where younger

Add that to the challenges or running a

people normally dominate staff numbers.

business and home life, plus fewer third

You can?t get a job if there aren?t any jobs to

spaces and social interaction as the world

get. And without enough money, mental

migrates further online, it?s no wonder that

health seriously suffers.

poor mental health is so common. But with

Focus

every downturn ? whether societally or individually ? eventually, there?s an upturn.

It?s a strange time. This is the safest and

New research finds companies are ident ifying serious supply chain risks but few can show

most affluent the West has been in history

If you focus what?s within your control ? by

t hat t hey manage t hem. Kumi Consult ing?s Responsible Sourcing Barometer 2026 finds a

(and worldwide, poverty is at its lowest ever

giving up some control ? and taking the time

growing gap bet ween corporate act ivit y and evidence of effect ive risk reduct ion as supply

to care for yourself (especially away from

chain due diligence requirement s cont inue to increase and grow in complexit y.


Regional

Companies are increasingly identifying significant human rights and environmental

Key findings

supplier capability.

to occur.

Only 14% of companies can point to

Companies know t he risks t hat exist in t heir

Act ivit y is running ahead of evidence

clear improvements resulting from

supply chains. The quest ion is whet her t heir

Over the past decade, supplier assessments,

their responsible sourcing activities.

risk management act ivit ies are act ually

audits, certifications, corrective action plans

Less than one in five (19%)

working.

and governance systems have become

actually reducing those risks.

measure outcomes for workers or

Labour and human rights issues dominate

commonplace, with data on these activities

New findings from the Kumi Responsible

the environment.

companies' stated risk priorities with around

now reaching the attention of boards as part

A quarter (25%) do not measure

half those surveyed stating this as their

of corporate risk management. However, the

programme impact at all.

biggest risk. Yet the research found

survey found that few organisations are

More than a t hird (36%) of companies

significant gaps between the recognition of

measuring whether their activities are

while responsible sourcing practices are now

identifying forced or child labour

relevant risks and the due diligence

improving outcomes for workers or the

firmly embedded within many organisations,

among their most serious risks

practices necessary to take action on

environment or meaningfully reducing

companies are focusing on activity rather

conduct no due diligence beyond

these risks.

harms. Less than one in ten companies (9%)

than effectiveness. The findings come at a

their direct suppliers, leaving

Nearly a quarter (24%) of participating

seek feedback from stakeholders such as

time when supply chain due diligence is

potential blind spots deeper in their

organisations have mapped only direct

workers when assessing the effectiveness of

increasingly subject to complex, changing

supply chains.

suppliers or have not mapped their supply

their responsible supply chain programmes.

chains at all. Among companies identifying

The result is a growing evidence gap. Many

forced or child labour as a priority risk, more

organisations can demonstrate what they are

than a third conduct (36%) no due diligence

doing. Far fewer can demonstrate whether it

beyond Tier 1, direct suppliers.

is working.

The findings indicate that organisations may

Reducing risk or t ransferring responsibilit y?

not be directing their resources to the areas

The research also highlights a tension

where the most significant risks are likely

between what companies identify as their

-

risks in their supply chains, but many still lack the evidence needed to determine whether their due diligence efforts are

Sourcing Barometer 2026, an independent

-

-

industry survey of 110 medium-to-large enterprises across 13 indust ries, reveal that

global regulatory requirements, customer

-

-

Nearly half (46%) have board-level

expectations and commercial risk.

oversight of responsible sourcing

Organisations are under growing pressure to

and 77% assign accountability to a

demonstrate not just that they have policies,

senior executive.

processes and governance structures in

-

Supplier capability is identified as the

place, but that these activities are producing

biggest barrier to progress, but only

meaningful results.

15% of companies prioritise building


News Regional biggest challenge and how they respond

confidential, cross-industry benchmarking

to it.

survey of responsible sourcing practices

Supplier capability emerged as the most

from across 110 independent responses from

frequently cited barrier to progress.

medium to large enterprises operating

However, a third of respondents (32%) said

across 13 industries. The research captures

they typically require suppliers to implement

the experiences, priorities and challenges of

corrective actions without providing

companies managing supply chain due

additional support, while only 15% said

diligence across a wide range of sectors and

building supplier capability was a priority for

geographies. Unlike many studies that rely

the year ahead.

on public reporting, the Barometer draws on

Drylining

confidential insights from companies about The report warns that unless expectations

what they are actually doing in practice.

Suspended ceilings

are matched with practical support, there is a danger that corrective action programmes

The findings provide valuable insights for

become exercises in transferring

boards, sustainability leaders, procurement

responsibility rather than addressing the

teams, compliance professionals and

underlying causes of risk.

investors seeking to understand the current

Glass Reinforced Gypsum (GRG) Taping and Jointing Perimeter Casings

state of responsible sourcing. Andrew Brit ton, CEO of Kumi Consult ing and one of t he principal aut hors of t he report ,

About Kumi Consult ing

said:

Kumi is an independent management

"The question is no longer whether

consultancy specialising in responsible

companies are doing due diligence. The

business conduct in global supply chains. We

question is whether it is delivering results.

help organisations understand and address responsible sourcing, human rights and

Our research shows that while companies have done a lot to make responsible

sustainability challenges, and put commitments into practical action.

sourcing part of their core business activities, there are crucial blind spots that

Kumi works across the world with

many companies are yet to address. There

organisations in diverse industry sectors

are now serious regulatory compliance and

including mining and metals, energy,

commercial risks related to responsible

infrastructure, agriculture, manufacturing,

sourcing, so it is vital that companies can

consumer goods and fashion. We combine

demonstrate that their programmes are not

expertise in risk assessment, management

simply producing activity but are

systems and controls, internal governance

meaningfully reducing risks and improving

and capacity building with practical, on the

outcomes for people and the environment."

ground experience across global value

Joinery

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chains. About t he Kumi Responsible Sourcing Barometer 2026

For more informat ion visit :www.kumi.consult ing

The Responsible Sourcing Barometer is a

07979 202 695


News Regional through to hotter consumer prices. With shoppers worried about rising borrowing costs and bracing for higher bills to land, they may be less likely to spend if price tags become more expensive. However, the longer the war with Iran continues to rage and keeps crude and gas prices elevated, the greater the chances of a hike later this year and next, especially if data shows consumer price inflation continues to rise. Already three members around the table wanted to hike rates immediately to 4%, and they may well be joined by more if the chronic energy crunch continues. So, a hike on November 5th still looks like a distinct possibility if the bonfires of inflation intensify. The US is a more robust patient, with the spending might of AI hyperscalers pulsing through the veins of the economy, supporting strong job creation, which is why the Fed moved to douse

FreezefromtheBank of Engl andas UKeconomy risks feel ingthechil l -

-

down inflation by hiking rates yesterday. What will t his mean for borrowers and savers? Borrowers shouldn?t assume that today?s hold means mortgage rates will stay frozen. Fixed mortgage rates are guided by swap rates, which reflect expectations for where interest rates are heading, rather than simply where Bank Rate

The Bank of England has kept Bank

Susannah St reeter, Chief Invest ment

stands today. With markets still pricing in further

Rate on hold at 3.75%.

St rategist , Wealt h Club

rate hikes, swap rates have been pushed higher,

Policymakers voted 6-3 to make no

?Inflation is the fever central bankers want

change, with three members voting for

to bring down, but the Bank of England is

an increase by 0.25 percentage points.

holding off administering the bitter medicine

The Fed moved first, given the US

of an interest rate hike. The UK economy is

economy is growing more robustly,

fragile, and already feeling the chill of

with resilient spending, strong

sluggish growth and a cooling jobs market,

However, savers could have more time to benefit

productivity and investment, while

and for now this should offset the risks of

from higher rates on cash, particularly if the Bank

demand remains weaker across the

steamy energy costs being passed easily

is forced to keep rates elevated for longer,

UK.

and lenders have already been raising some fixed mortgage rates. So even though the policymakers have kept their hands firmly in their pockets for now, borrowers coming off fixed deals could still face higher rates when they remortgage.

although

www.gppl i mi t ed.co.uk

07552413719


Regional

News Regional the rates on offer will vary as banks adjust

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Focus

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Why the government?s debt is growing: current public spending pressures explained David McMillan Professor in Finance, University of Stirling


Focus

Focus

Pressure to make cuts in public spending has

have implications across the economy,

intensified in recent weeks, with increased

including for government spending and tax

calls on Prime Minister Andy Burnham to

decisions, investment by firms and mortgage

find savings urgently.

rates for households.

The need to reduce expenditure has become

Spending scrut inised

more pressing as the cost of loans used to

The question is why are yields rising,

pay for services has shot up.

especially for the UK?

With the bill on the government?s borrowing

The level of government debt is at record

rising sharply there is less room for

highs. The US has just passed £29.6 trillion,

manoeuvre in the public finances ahead of

the UK owes around £3 trillion, Japan £6

new Chancellor John Healey?s first budget on

trillion and France over £2.5 trillion.

October 28. These levels of government debt have So, why is this happening, and what is

worried the market and investors because of

causing the interest to grow so quickly?

concerns about the ability of governments to

When governments borrow money, they do

repay the loans. While debt rose through

this by issuing bonds. These are essentially

policy responses to the financial crisis in

IOUs in which the government agrees to pay

2008-09 and the Covid pandemic with little

back the borrowed sum on a certain date,

impact on long-term yields, markets

with interest paid in the meantime. These

are now scrutinising current government

bonds are then bought by a range of

spending closely.

investors, including pension and insurance

This was seen with the Liz Truss

companies, commercial and central banks,

?mini-budget? of September 2022 and when

hedge funds and private investors.

Keir Starmer reversed proposed welfare cuts.

As these bonds change in value according to

In each case, the UK bond yield rose

market fluctuations, their cost to the

noticeably. This is now an issue confronting

government varies. The amount in yields

the new Burnham government that has

paid to investors on the bonds goes up or

already committed to higher spending such

down accordingly, and when the yields rise it

as a VAT cut on energy bills, a bus fare cap, a

is more expensive to issue new bonds.

rough sleeper commitment, council house

Long-term bond yields have risen to

expansion, and an increased defence budget.

multi-decade highs. The UK is not alone in

With the autumn budget coming up, bond

seeing such expensive yields and, therefore,

markets are sending a warning shot to the

high government borrowing costs, but has

UK government to present a plan to control

seen the largest rises among major

spending. The UK has the highest long-term

economies.

bond yields of comparable countries as a

The UK is experiencing a notable switch from

result of a greater sell-off of UK bonds by

low to highest rates. These higher yields

investors worried about a new bout of

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Focus

government borrowing.

cargo traffic through the Strait of Hormuz

drives up inflation and expectations for

billion in debt.

Bond markets are reflecting concerns that

has inflated prices.

future inflation. This may also lead to

This all adds to the total amount of bond

the UK government may seek to cover some

The increase in Middle East hostilities has

increases in the Bank of England base

supply, resulting in investors requiring

seen the crude oil price rise around 30% in

interest rate, which directly affects

higher returns.

rates, which will have a dampening effect on

the last two months, from the high US$60s

mortgages. Cuts in the rate expected

future economic growth and employment.

(£44) in early July to near US$90 now. In the

at the start of the year will certainly not materialise.

Debt is not the only reason behind the

UK, the effects of higher oil and gas prices

increase in bond yields. Higher inflation and

are seen in the energy price cap, which has

There is a further factor driving up bond

given its current level of debt, its exposed

the view that it may remain elevated, largely

recently risen and is expected to do so again.

yields. While governments are issuing bonds

position to inflation and global energy prices

due to the re-escalation of the Iran conflict

The effect of the Iran conflict and

to cover spending gaps, technology firms are

plus the uncertain outlook for sustained

and associated higher energy costs,

restrictions on cargo passing through the

also issuing bonds in order to invest in AI,

economic growth.

also contributes.

Strait of Hormuz have broad effects across

because they believe that this sector will see large future growth. This year, to

The Middle East conflict and restrictions on

fuel, energy, shipping and food prices. This

of its increased spending though higher tax

This brings us back to the budget next month. The bond market is sending a clear signal that the UK needs to control spending

date, tech companies have issued US$220

This creates difficult choices for the new prime minister and chancellor.


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