"I worry about complacency. Fiscal room for manoeuvre is thin across the developed world, and the toolkit that helped during the financial crisis-large‑scale QE, in particular-can't be mobilised in the same way again. Yields have risen sharply but mostly in an orderly fashion; we've not had many "cliff‑edge" moments outside Japan. That doesn't mean we're safe. If market participants decide they will only finance governments at much higher rates, the spiral can be vicious. We're vulnerable to that kind of shift in sentiment."
"Independence matters precisely because electoral cycles are short and the temptation for political expediency is constant. I was managing gilts in the run‑up to the 1997 election; the day Gordon Brown granted the Bank of England operational independence, the market staged one of its biggest rallies. That said, independence doesn't mean operating in a vacuum. Treasury, central bank and broader government policy must work in concert-something that's been lacking at times, notably in the United States."
Helena Morrissey built a prominent investment career, becoming chief executive of Newton Investment Management at 35 and more than doubling assets under management over 15 years. She now chairs Fidelis and the Eton College endowment and focuses on investor and leadership priorities. She warns that developed‑market fiscal room is limited and that large‑scale QE cannot be replicated in the same way, leaving markets vulnerable if funding sentiment shifts. Yields have risen largely in an orderly manner, but a rapid repricing could trigger a vicious spiral. She stresses central‑bank independence and coordinated policy, and cites contrarian discipline from buying long gilts when yields exceeded 8%.
Read at Business Matters
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