© Reuters. FILE PHOTO: Pound banknotes are seen in this illustration taken March 1, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
LONDON (Reuters) – The cost of insuring exposure to Britain’s sovereign debt rose by 2 basis points on Wednesday, hitting levels last seen in June 2020 when markets were recovering from the COVID-19 rout, after Liz Truss took over as prime minister.
Five year credit default swaps climbed to 27 bps after closing at 25 bps on Tuesday, data from S&P Global (NYSE:) Market Intelligence showed.
Markets had greeted the arrival of Truss on Tuesday with the sharpest sell-off of long-dated UK government debt since the COVID-19 pandemic, with 10-year yields hitting their highest since 2011 at around 3.15%.
Truss vowed to take immediate action to tackle one of the most daunting set of challenges for an incoming leader in Britain’s post-war history led by soaring energy bills, looming recession and industrial strife.
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