UK gilts to stay on edge as markets await next PM, says bond investor

• UK bond markets are highly sensitive to political changes and fiscal policies, with concerns about a 'Liz Truss' scenario if expansionary policies are pursued.
• The UK faces a challenging economic backdrop with higher-than-average inflation and a deteriorating fiscal position, requiring significant government borrowing.
• There are concerns about whether potential leaders like Andy Burnham can effectively manage the national economy, especially given the complexities of Brexit and the Bank of England's current stance.

Ben Emons of Highline Asset Management warns that UK bond markets remain on edge due to the country's worsening fiscal position, high inflation, and political instability. He highlights the challenge for any incoming Prime Minister to balance growth-boosting policies with fiscal credibility, cautioning against expansionary measures that could trigger a loss of market confidence.