Kwarteng: Situation with bond markets is worse than at the time of the mini-budget

Former Chancellor Kwasi Kwarteng has said the bond market situation is worse than at the time of the mini-budget, due to higher rates and no growth strategy.

Speaking on GB News, he said: “[The bond markets] matter because as people sell bonds, the interest rates go up. And if you have a house and you want to remortgage that house, the interest rate you’re going to be paying if yields are going up is going to be much higher than the rate at which you borrow.

“Of course you will remember the mini-budget, the famous mini-budget. The two-year [yield] went up to 4.5% and that was a huge deal.

“It’s now at about 5.5% – it was trading at 5.7% last week, and the 10-year is much higher. So all the interest rates are much higher.

“And as a consequence of that, the interest the government pays is more. They’re going to have to pay more. £120 billion now.

“And people who are looking to refinance, whether it’s a company loan or particularly mortgages, are also going to have to pay more.

“And the situation is made worse by the fact that there’s no real end in sight.

“There’s no growth plan, there’s no commitment to reduce spending.

“So what people who are investing, who are lending the government money effectively are saying is, ‘Well, you’re going to have to pay more.’

“And of course, that interest rate affects the entire country.”