The UK State and the Problem of Inflation

Philip Arestis and Nikolaos Karagiannis
Additional contact information
Philip Arestis: University of Cambridge
Nikolaos Karagiannis: Winston-Salem State University

Chapter Chapter 3 in Proper Economic Policies Under the Post-Pandemic Era, 2025, pp 79-133 from Springer

Abstract: Abstract The UK high inflation data caused short-term borrowing costs to increase, due to expectations of high interest rates. Two-year gilt yields increased by 0.5% to 2.45% on 17 of August 2022. At the same time, the 10-year long-term bonds were under softer pressure, with the 10-year yield rising by 0.19% to 2.32%. Both gilt increases were due to falling prices of gilts in view of expectations of higher inflation and low level of economic activity. Consequently, inversion of the yield curve emerged. Similar yield curve inversion emerged in June 2023. On the 21st of June 2023, the yields were 4.74% for the two-year treasury yield and 3.78% for the 10-year debt. Increases in interest rates harmed borrowers while yield curve inversion hurt banks, which borrow at short-term rates and lend at long-term rates.

Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-88520-4_3

Ordering information: This item can be ordered from
http://www.springer.com/9783031885204

DOI: 10.1007/978-3-031-88520-4_3

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().