UK Pension Market Stress in 2022 - Why It Happened and Implications for the U.S

Santiago I. Sordo Palacios and Ketan B. Patel
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Ketan B. Patel: https://www.chicagofed.org/people/p/patel-ketan

Chicago Fed Letter, 2023, vol. no 480

Abstract: A steep increase in British sovereign yields and swap rates and an equally steep drop in the value of the British pound (GBP) in September 2022 put substantial liquidity pressures on United Kingdom pension funds. This repricing in risk assets was triggered by the UK chancellor’s mini-budget announcement on September 23, 2022, which led to reactions from market participants. The structure and investment strategies of pension funds made them particularly ill-prepared to deal with market turmoil.

Keywords: financial; economics (search for similar items in EconPapers)
JEL-codes: G01 G23 H63 H75 J32 (search for similar items in EconPapers)
Date: 2023
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