WASHINGTON, Sept 28 (Reuters) – The collapse of the British pound and subsequent sell off in the country’s bond market in recent days do not pose systemic risks but will affect global markets, PIMCO chief investment officer Dan Ivascyn told the CNBC Delivering Alpha conference in New York.
Ivascyn added that the Bank of England’s decision overnight to prop up the bond market was a short-term fix that would not address waning investor confidence in British policy.
Since Friday’s UK mini-budget budget flagged 45 billion pounds ($48 billion) worth of unfunded tax cuts, sterling has lost 6% of its value and hit record lows while British bond prices soared. The chaos in a major developed economy adds to unease already generated by sharp interest rate rises from the United States and elsewhere.
(This story corrects name of conference to Delivering Alpha in first paragraph)
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Reporting by Davide Barbuscia; writing by Michelle price
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