The UK's economic misery, in a chart
Remember when a brief spike in UK government bond yields caused the downfall of Prime Minister Liz Truss after just 45 days in office? It turns out those bond yields were just a sign of things to come.
Why it matters: UK interest rates have a direct effect on discretionary income, since most UK mortgages reprice every two years.
- Barclays CEO C.S. Venkatakrishnan estimates that UK homeowners will be spending as much as 30% of their income on mortgage payments, up from about 20% previously.
The bottom line: The combination of high inflation, broad homeownership, and very short-term mortgages is disastrous for PM Rishi Sunak and for the entire UK economy.