Britain’s stockmarket has languished. Its gilt market may be next

Look at britain’s ftse 100 share index and you might think that the City of London is once again on top of the world. Investors around the globe had a terrible time in 2022, but those who stashed their money in London’s bourse were spared. America’s tech-heavy nasdaq index fell by a third, making it one of the worst years on record. Meanwhile, the ftse 100 hit a new record high last month. While rising interest rates and higher commodity prices hammered many stocks, they flattered the banks, miners and energy giants of London’s once-unfashionable stock exchange.

Even Britain’s sovereign-debt, or “gilt”, market has settled down. Just months ago a disastrous budget by Kwasi Kwarteng, then chancellor of the exchequer, threatened it with catastrophe. But under Jeremy Hunt, Mr Kwarteng’s more competent and responsible successor, a repeat seems out of the question. As Mr Hunt prepares to unveil a new budget on March 15th, government borrowing is set to be £30bn ($36bn, or 1.3% of GDP) lower this fiscal year than forecast in November.