UK budget under threat from US reflation policies

Professional Adviser
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Standard Life Investments head of global strategy Andrew Milligan says UK government plans to increa...

Standard Life Investments head of global strategy Andrew Milligan says UK government plans to increase borrowing could be under threat from reflation policies pushed by a supply-side-friendly US administration. Rising US inflation will make it more expensive to sell UK government debt because investors will demand higher guaranteed yields as returns fall relative to stock market investments. This will pose a headache for chancellor Gordon Brown, who is widely tipped to use this week's pre-Budget statement to introduce new borrowing targets in order to overcome a downturn in co...

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