Local authorities: When the debt tide turns

Where next for indebted councils up and down England?

clock
James Sullivan of MitonOptimal
Image:

James Sullivan of MitonOptimal

With global debt creeping towards $250trn, it is at a level that, to be understated, raises a few eyebrows.

However, for the time being, the cost of servicing such debt remains remarkably low. For context, the US alone represents about $70trn of that debt, with US government debt alone equal to circa 100% of GDP.  Let us imagine the cost of that debt jumped overnight unexpectedly by 100bps (1%). It would send shockwaves through the debt market, and in turn, the equity market.  It would also signal that policymakers were concerned the quantum of debt in the system was too fast and loose. That is precisely what happened last month when the Public Works Loan Board (PWLB) moved rates from 1....

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Funds

The ETFs aim to overcome traditional yield shortfall by using multi-factor investing.

Invesco launches two ESG credit ETFs

Invesco has launched two new ESG ETFs that provide investors with access to investment grade fixed-rate euro-denominated unsecured corporate bonds from global issuers.

clock 29 June 2022 • 2 min read
The ETF will be available to investors on London Stock Exchange for a total expense ratio of 0.35%.

Franklin Templeton launches Catholic EM sovereign debt ETF

Article 8 ETF for European investors

clock 28 June 2022 • 1 min read
Industry Voice: PIMCO Secular Outlook

Industry Voice: PIMCO Secular Outlook

Reaching for Resilience

PIMCO
clock 28 June 2022 • 2 min read
Trustpilot