Gilt markets seem to have stabilised lately, and markets are taking their cue from the modestly positive tone in economic data out of the UK.
For now, noises suggesting that Andy Burnham may take a relaxed view of the UK fiscal rules are being ignored, and sterling is joining in the generally good performance of British assets.
This week’s quarterly GDP numbers are expected to show a slowdown from the strong pace of growth in the first quarter of the year, with the economy still buoyed by government spending, as private investment lags.
This is not the best basis for future growth, but markets deem it good enough for the time being. Barring any major surprises, this could be a relatively quiet week for British news, as the steady stream of policy announcements has dried up since Burnham disappeared for his holiday.
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