Pensions Are Now a Millstone for Britain

by Marion Dakers

Never mind the train strikes – the most damaging walkout of the summer won’t be the RMT members at Eurostar and Southern, but the refusal of the City’s bond­holders to join the Bank of England’s latest scheme to boost the economy.

The sellers’ strike on Tuesday, as bondholders declined to take the Bank’s generous offer to buy government debt above the odds, left just £52m on the table out of a possible £1.17bn – but it could be the first of many small shortfalls in the stimulus programme over the coming months.

Numerous big investors have said the pension funds that own these reliable bonds to match their massive liabilities are in no mood to part with them, and this reluctance will only push the price higher, weakening the returns they can get.

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