Trading Burnham’s Britain

Has UK fiscal credibility got a new name?

We were tapped on the shoulder a couple of times over the past week about UK asset spread swaps before the Bloomberg report came out today.

Even though we have laid out our stall on how we see the BoE moving through to year-end in The BoE Hikes In Sept, we have largely stayed clear of any politically-driven UK plays so far this year, having been stopped out of our UK long 2s30s trade back in March.

We now see several promising fiscal signs heading into the autumn budget, and as new PM Burnham’s initial plans are implemented when parliament returns from recess. This makes Rates plays more attractive, through asset spread swaps or other plays.