I fear/re-iterate (I have posted this before) prolonged inflation ( or for a while yet).

The budget today was more about giving handouts than growth IMO.
New government roles, more tax inspectors, handouts to schools to incorporate child minding facilities as well as extra funding to support SEN with out no mention of extra or better teaching (no doubt lead to schools to focus on where to get extra funding at the expense of quality education) - is just putting more monies and incentives into the long term state drain without any good long term country benefits.

So everyone will get more monies (good), but with fewer growth areas to spend on (bad), all leading to higher prices. Further aided by the increase in higher employer NI contributions and more regulatory reporting (thanks and to keep the new state posts active and be see to be doing something) costs which will need to be pushed down to the tills. Thus re-affirming higher prices - which is to be offset by the higher Min Wage.

Overall a budget based on an ideology and a tit for tat mentality without much substance.

The last lot could not get Boris to pay a £100 fine despite spending thousands in inquiries and legal costs. Now imagine what range of costs a new army of state civil servants will or actually need to achieve at all. They get paid and accrue benefits either way.

The Chancellor did make a point to shake of the doubt she was an economist in her opening gambit. However that is about it - all further clarification is to come in 8-10 year time (and if they get booted out then they can say they were on course but did not have the opportunity)

So I am not expecting inflation to go away anytime soon and expecting interest rates to stick around the 4% mark long term and inflation 3-4%. In other words managed redistribution.

Some parts of the economy, like the services sector, are still seeing significant price increases, but I think the war on inflation looks to be won.

Either way rates are still under pressure due to government spend needed. From what I understand, increased borrowing can lead to higher interest rates, especially if the market is skeptical about the government's fiscal policies. This I presume can create a challenging environment for central banks trying to stimulate the economy during a recession. What's remarkable is how financial education on this topic wasn't something I was ever privy to until I DIY. Everyone needs to know this stuff.

But the CBs can use QE or QT type interventions to manipulate the yield curve to where they want it to be e.g if they want rates to be 3% but gilts are sliding so yields are getting above that they can just get buying (printy printy!) so yields stay at 3%.

Where it gets interesting is if the "bond vigilantes" (ie a sceptical market) call the CB's bluff and it gets into a war over who's got most conviction they're right.

The US situation can be kicked down the road because they are doing well. Trump's tariffs could significantly impact the UK. We are highly dependent on the US, right? We'll need to do QE, pushing the pound down. The US is the UK's largest individual trading partner, accounting for a substantial portion of UK exports. If Trump imposes high tariffs on imports, it could make UK goods more expensive in the US, reducing demand and hurting UK businesses. Sectors like pharmaceuticals and automotive exports could be affected.

Retail investors might struggle with being ahead. I've mentioned that Goldman Sachs staff I know invested heavily in gold in their personal accounts around the start and mid-year.

At what point do yields have a negative impact on stocks? I've heard 5% on the 10yr in US could break the equity rally.