There is “significant uncertainty” about the ability of weaker UK home owners whose debt was bundled into residential mortgage-backed securities to repay the principal when the loans mature, according to Fitch Ratings, Bloomberg News reported. Sharp rises in mortgage rates have led to a spike in so-called nonconforming borrowers failing to make their full monthly payments. In an index of those home loans tracked by the ratings agency, arrears of one month or more surged 11.1 percentage points to 24.2% from December 2021 through November 2024.
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United Kingdom
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The U.K.’s long-term borrowing costs surged to the highest level in more than a quarter of a century, raising the prospect of Chancellor of the Exchequer Rachel Reeves needing to raise taxes again in order to meet her fiscal rules, Bloomberg News reported. The yield on 30-year gilts climbed four basis points to 5.22% on Tuesday after the first of a string of bond sales due over the coming weeks.
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A surge in Christmas holiday spending wasn’t enough to rescue U.K. retailers from anemic growth for 2024 as a whole, with economic woes continuing to depress confidence among British shoppers, the Wall Street Journal reported. Total retail sales increased by 3.2% on year in the four weeks to Dec. 28, a vital shopping season when consumers buy gifts, food and drinks for the Christmas and New Year holidays.
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A crafting company founded by Sara Davies, the entrepreneur and Dragons’ Den panellist, is set to appoint administrators as part of a pre-pack insolvency of the business, The Times reported. Crafter’s Companion, which Davies, 40, turned from a start-up in her university bedroom into an international seller of paper craft, art and sewing products, is preparing to appoint administrators at Interpath as part of a fast-track process. A notice of intention to appoint administrators was filed at the High Court in recent days by Growth Partner, the business’s majority shareholder.
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Britain's anti-trust regulator said it would begin two investigations this month using its new powers over the biggest tech firms, which are aimed at stimulating investment, innovation and growth, Reuters reported. The CMA will designate firms as having "Strategic Market Status" (SMS) in relation to a particular digital activity before they can be investigated. The bar for SMS status is high, with only the largest, most influential tech firms affected.
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UK long-term borrowing costs are nearing the highest levels in more than a quarter of a century as traders brace for a raft of bond sales this week, Bloomberg News reported. The yield on 30-year gilts rose as much as four basis points to 5.19%, nearing the 5.21% high seen in 2023. US Treasuries are also feeling the heat of impending bond sales, with the equivalent yield earlier rising to a 14-month high as investors prepare for three-, 10- and 30-year securities this week.
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