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Global financial institutions are turning to buy UK government bonds, driven by their confidence in the government's commitment to fiscal discipline and the release of a fixed budget on October 28. Expectations are that yields will decline if this materializes. UK bonds have outperformed their counterparts in France and the US in terms of stability, with 30-year yields reaching 5.8% and 10-year yields at 5.38%. However, slowing growth, increasing social welfare spending, and rising energy costs pose structural challenges, while experts emphasize the need for cautious fiscal policies to ensure market stability.
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