Proportional Representation for the next General Election and the gilt market

In a new report for the Federal Trust, John Stevens argues that the UK’s persistently high Gilt yields reflect a growing political risk premium attached to First Past the Post. He shows how the fragmentation of the FPTP party system since the 2008 financial crisis, accelerated by Brexit, has raised the prospect of governments elected on ever-smaller vote shares, unsettling bond markets already concerned by weak growth, high debt and deteriorating creditworthiness. Proportional Representation for the Next General Election and the Gilt Market argues that adopting PR before the next election would be a low-cost, high-impact measure to restore investor confidence and ease the UK’s fiscal pressures.