Bailey Cites Long-Term Pressures Driving Up Government Debt

Bank of England Governor Andrew Bailey pointed to long-term pressures driving up government debt across advanced economies. He identified weak productivity, COVID-19 shocks, ageing populations, and higher defence spending as key factors contributing to this trend.

Bailey's comments came at a conference hosted by the London School of Economics' Trium MBA programme. When asked about investors seeking higher interest rates on French government debt, he said: 'That is, I think, relevant to thinking about the pressures on bond markets.'

Government bond yields have surged in recent months, with British 10-year bond yields reaching their highest in almost 20 years and longer-dated yields hitting their highest since 1998.