Bank of England Keeps Interest Rates on Hold

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In a knife-edge vote, with Governor Andrew Bailey casting the deciding ballot, the MPC (Monetary Policy Committee) voted 5–4 to keep interest rates on hold at 4.00%. It was a narrower margin than expected, with one poll of economists prior to the announcement predicting a 6–3 vote in favour of keeping borrowing costs unchanged. Indeed, two Deputy Governors of the Bank of England, David Ramsden and Sarah Breeden, along with the rest of the minority, voted for a 25-basis-point rate cut. It was also the first time that Sarah Breeden voted against the majority since joining the MPC in 2023.

Although inflation remains almost double the Bank’s target, officials announced after the vote that they believe inflation has now peaked at 3.8%. The MPC also signalled that rates could fall to 3% by 2028, while some analysts predict that cuts could come sooner. Experts suggest that Governor Bailey’s deciding vote was influenced by several factors, one being his desire not to appear biased towards the government, particularly with the Chancellor’s Budget just around the corner. It is also thought he preferred to wait and see what fiscal measures the Chancellor will announce, especially as she has been signalling a short-term increase in taxes.

Minutes released from the MPC meeting showed that Governor Bailey was the most dovish among the majority. In a written statement, the Governor said: “We still think rates are on a gradual downward path, but we need to be sure that inflation is on track to return to our 2% target before we cut them again”.

A number of market experts have described this as a “dovish hold”. Governor Bailey also remarked that “upside risks to inflation have become less pressing since August”. Analysts suggest that another reason for maintaining rates was the Governor’s preference to wait for further evidence that inflation is continuing to decline.

Interestingly, several financial experts believe that the Bank of England’s latest inflation forecast has paved the way for an interest rate cut (estimated at 25 basis points) when the MPC meets again on 18th December. Data shows that the Bank of England has cut interest rates five times since Labour won the general election on 4th July 2024. Following today’s decision, Governor Bailey noted that “the MPC would have an opportunity to consider the Budget before its 18th December meeting”.

If, as suspected, the Budget includes tax increases, analysts predict that weaker demand could follow, pushing inflation lower in 2026 and thereby creating a plausible case for a rate cut in December.

Taking a Fiscal Holiday from the UK

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How Wealthy Individuals Can Protect Their Capital, Leverage Arbitrage, and Live Free While the Storm Passes

Introduction

There are moments in history when prosperous individuals face more than the usual commercial and personal challenges. They face governments intent on taxing away their achievements, cultures that punish success, and fiscal systems that transform aspiration into liability. Today’s United Kingdom increasingly reflects that predicament.

Taxes are rising, rhetoric is hostile, and those who have built fortunes through effort, intelligence, and enterprise are being portrayed as the problem rather than the solution. For those who have created and preserved wealth, the question is no longer whether to act, but how to act intelligently.

One elegant solution is the Fiscal Holiday — a temporary, structured exit from the UK tax regime that enables wealth to be protected, income optimised, and a lifestyle enjoyed, without permanently cutting ties.

This article explores in depth how a Fiscal Holiday works, why the timing is ideal, and how it can be structured for maximum advantage.

Why Wealthy Individuals Are Looking for Alternatives

Political Climate in the UK

A far-left Labour government is committed to increasing taxes on income, capital, and inheritance. Those who employ people, create jobs, and generate prosperity are increasingly targeted as a source of revenue for redistribution.

Rising Taxation and Reduced Freedom

  • Income tax thresholds are frozen, creating stealth taxation.
  • Inheritance tax reforms are openly discussed.
  • Capital gains tax increases are likely.
  • Non-domicile status is being eroded.

For individuals with significant assets, this means one thing: escalating tax burdens that diminish wealth and restrict freedom.

Global Alternatives Are Attractive

At the same time, jurisdictions such as Switzerland continue to offer stability, discretion, and attractive financial tools. Swiss banks provide access to Lombard lending — secured loans against investment portfolios — at interest rates well below UK borrowing costs.

Combined, these conditions create an opportunity for intelligent arbitrage.

The Concept of a Fiscal Holiday

A Fiscal Holiday is not permanent emigration. It does not require renouncing British ties or liquidating assets. Instead, it is a temporary restructuring of one’s residency and financial flows to achieve three goals:

  1. Avoid punitive taxation during unfavourable political cycles.
  2. Leverage global banking tools for arbitrage profits.
  3. Enjoy lifestyle freedom while preserving the option to return.

In essence:

  • Unlock liquidity from UK assets.
  • Invest those funds in secure gilt instruments.
  • Use them as collateral for Swiss franc Lombard loans.
  • Deploy the loans into lifestyle assets — such as a yacht — while stepping outside UK tax residency.
  • Offset borrowing costs in the UK through rising rental income.
  • Unwind the structure when conditions improve.

How the Fiscal Holiday Works – Step by Step

Step 1: Borrow Against UK Assets

Raise liquidity against UK property or real estate portfolios. These assets are typically illiquid but can be pledged to raise significant borrowings.

Rental income from UK holdings often offsets interest expenses, especially with rental yields rising due to housing shortages. This allows liquidity to be raised at little or no net cost — and sometimes even with positive cash flow.

Step 2: Transfer Liquidity Offshore

Transfer the borrowed funds to a Swiss private bank — the global benchmark for discretion, security, and sophisticated wealth management.

Step 3: Acquire UK Gilts

Invets the offshore funds into UK government gilts. Advantages include:

  • Security of principal (UK sovereign debt).
  • Predictable income streams.
  • Strong collateral value for Swiss banks.

Long-dated gilts yielding 4–5% can be particularly effective.

Step 4: Pledge Gilts for Lombard Loans

Pledge the gift portfolio to a Swiss private bank to obtain Lombard loans in Swiss francs (CHF).

  • Typical loan-to-value: 65–75%.
  • Interest rates: significantly below gilt yields.
  • The result: a net arbitrage profit.

Step 5: Deploy Lombard Proceeds

Use the loan proceeds — in CHF, euros or USD — to purchase lifestyle assets such as a yacht.

The yacht offers:

  • Offshore residency (a floating home).
  • Global cruising freedom.
  • Charter potential for income generation.

Step 6: Non-Residency & Fiscal Safety

By living offshore — aboard a yacht or in low-tax jurisdictions — individuals can remain outside the UK’s Statutory Residence Test, ensuring freedom from UK taxation on global income during the Fiscal Holiday.

Step 7: Reversal and Return

When UK fiscal conditions improve, the process can be reversed:

  • Sell or refinance the yacht.
  • Repay Lombard loans.
  • Liquidate gilts if necessary.
  • Repay UK property borrowings.
  • Re-establish UK residency with wealth fully preserved.

The Added Advantage: Rental Income

UK rental income currently favours landlords:

  • Chronic undersupply of housing.
  • High mortgage rates are pushing demand for rentals.
  • Rising rents provide consistent income growth.

For wealthy individuals with real estate portfolios, this trend is highly favourable. When borrowings are raised against property, the interest expense is usually — and often more than — covered by incoming rental income.

Thus:

  • Borrowings can be fully covered by rent.
  • Rental income rises even as debt costs remain stable.
  • The Fiscal Holiday is self-funding without diminishing core wealth.

A Comprehensive Worked Example

Let’s build a more detailed model.

Assets

  • UK property portfolio: £20 million.
  • Net rental yield: 5% (increasing annually).
  • Current rental income: £1 million per annum.

Step 1: Borrow Against Property

  • £5 million facility secured against portfolio.
  • Interest cost: 4% = £200,000 p.a
  • Rental income covers interest, leaving £800,000 surplus.

Step 2: Transfer Funds Offshore

  • £5 million transferred to a Swiss private bank.

Step 3: Acquire Gilts

  • £5 million invested in long-dated gilts at 4.5%.
  • Annual return: £225,000.

Step 4: Lombard Loan

  • Gilts pledged at 70% loan-to-value.
  • Lombard loan: £3.5 million equivalent.
  • Interest rate: 1.75% (CHF).
  • Annual cost: ~£61,000.

Step 5: Arbitrage Profit

  • Gilt income: £225,000.
  • Lombard loan cost: £61,000.
  • Net Arbitrage profit: £164,000 p.a

Step 6: Yacht Purchase

  • £3.5m Lombard proceeds used to buy a 40-metre yacht.
  • Yacht offers global mobility and potential charter income of £400,000–£500,000 p.a

Net Result

  • The UK property portfolio continues to generate £1m in rental income, offsetting UK borrowing costs.
  • Arbitrage generates £164,000 annually in Switzerland.
  • Yacht provides both lifestyle benefits and income.
  • UK tax residency is suspended — shielding global gains.

After 5 years:

  • Yacht sold or refinanced.
  • Loans repaid.
  • Assets intact.
  • Wealth preserved and enhanced.
  • UK residency can be re-established.

Lifestyle Benefits of the Fiscal Holiday

Beyond financial advantages, the Fiscal Holiday offers:

  • Freedom of Movement: Live globally without fiscal constraint.
  • Exploration: Cruise the Mediterranean, Caribbean, or beyond.
  • Privacy: Reduced scrutiny via offshore structures.
  • Quality of Life: More time for family, travel, and personal pursuits.

Key Risks and Considerations

  • Residency Planning: The UK’s Statutory Residence Test must be managed carefully.
  • Currency Exposure: GBP/CHF exchange rates require hedging.
  • Liquidity: Gilt maturities should align with Lombard terms.
  • Yacht Costs: Operating expenses must be budgeted or offset through chartering.
  • Exit Timing: Political cycles influence the optimal window for re-entry.

Why Switzerland Is Central

Switzerland remains unmatched for:

  • Political stability and neutrality.
  • Competitive CHF lending.
  • Expertise in Lombard structuring.
  • Discretion and professionalism.

No other jurisdiction combines all these advantages.

Conclusion

A Fiscal Holiday is not about fleeing the UK permanently. It is about strategic timing, financial intelligence, and lifestyle freedom.

By leveraging UK property, offsetting borrowings with rental income, acquiring gilts, securing Lombard loans in Switzerland, and investing in lifestyle assets such as yachts, wealthy individuals can:

  • Shield themselves from punitive taxation.
  • Generate ongoing arbitrage profits.
  • Maintain rising income streams.
  • Enjoy global freedom and privacy.
  • Retain the option to return when conditions improve.

In short, it is a strategy that protects wealth, preserves dignity, and ensures that success is enjoyed — not penalised.

For those with foresight, the time to plan a Fiscal Holiday is now.

Bitcoin Continues to Fall After October Crisis

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Yesterday, Tuesday 4th November, Bitcoin fell 7.4%, dropping below the $100,000 mark ($96,794) for the first time since 23rd June this year. Experts in the sector suggest that Bitcoin holders, as well as cryptocurrency investors in general, have been selling this risk-on asset amid growing concerns over current stock valuations, which have likely been driven to unsustainable heights by the Artificial Intelligence (AI) trade. Bitcoin has now fallen 20% from its record high reached in October. While there was some recovery earlier today in New York, traders in the options markets are, according to analysts, placing bets on further declines.

Analysts suggest that one reason for the latest fall in Bitcoin’s price is that long-term holders of the cryptocurrency have, over the last month, offloaded approximately 400,000 coins with a combined value of $45 billion. Unlike the forced leveraged selling seen last month, the current decline is more measured, representing a continued sell-off in the spot market. This price fall has also diverged from the usual pattern where bursts of volatility stem from liquidations in the futures market. Data released by CoinGlass — a cryptocurrency derivatives data analysis platform providing real-time information- shows that since yesterday morning, around $2 billion in crypto positions have been liquidated.

One market expert has stated that a market imbalance is emerging. As leverage remains relatively subdued, attention has turned to long-term holders who are now selling Bitcoin. There appears to be a growing disconnect between these long-term sellers and first-time buyers, which is shaping a market no longer driven solely by sentiment. Analysts have observed that since major holders with between 1,000 and 10,000 Bitcoins (so-called “mega-whales”) began offloading large portions of their portfolios, and since last month’s crash, overall demand has waned.

Other analysts, however, suggest that despite the absence of specific bad news, the market is fatigued and struggling under multiple pressures. There are ongoing concerns regarding the trade war, whether tariffs will hold, and whether the Supreme Court will decide if such tariffs are legal. Added to this are the continuing government shutdown, spiralling public debt, overpriced stocks, and caution over U.S. interest rates. Furthermore, one analyst commented that fundamentals remain weak across the board following last month’s major sell-off.

Market commentators remain divided over Bitcoin’s near-term future. One analyst suggested that now Bitcoin has fallen below the $100,000 threshold, it could drop as far as $70,000 before resetting and recovering. Others, however, believe that Bitcoin will gradually climb back if economic and geopolitical conditions improve, particularly if the United States-China trade talks yield a stable agreement. Despite a recent outflow from Bitcoin ETFs, experts remain broadly optimistic that fund managers could see gains over the coming months, though with fundamentals still fragile, Bitcoin’s price outlook remains uncertain.

The Federal Reserve Cuts Key Benchmark Interest Rates

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On Wednesday, 29th October, the Federal Reserve’s FOMC (Federal Open Market Committee), for the second time in 2025, and in consecutive months, reduced interest rates by 25 basis points to 3.75% – 4.00%, marking the lowest level in three years. The vote to cut rates was 10 – 2 in favour, with two dissenting voices opposing the decision: Stephen Miran and the President of the Federal Reserve Bank of Kansas City, Jeffrey Schmid.

It appears that the Federal Reserve is divided into two camps, with the dissenters concerned about inflation, while the majority are focused on the job market. Two non-voting members of the FOMC, Lorie Logan, President of the Federal Reserve Bank of Dallas, and Beth Hammack, President of the Federal Reserve Bank of Cleveland, who will rotate into voting positions in 2026, both indicated they would have preferred to hold rates steady this time.

Remarks made by the aforementioned Federal Reserve Bank Chairs suggest that, moving forward, there will be a lively debate over the next six weeks ahead of the next FOMC policy meeting on 9th – 10th December. It is shaping up to be a direct contest between those concerned about persistent inflation and those prioritising support for the labour market. Dallas Fed chair Logan remarked, “I’d find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labour market will cool more rapidly.”

At a press conference following the rate cut, Federal Reserve Chairman Jerome Powell advised that another reduction at the next policy meeting in December “is not a foregone conclusion”.  The Chairman added, “There were strongly differing views on how to proceed in December during the meeting today and we have not made a decision about December”. Therefore, no decision has yet been made regarding future rate cuts, with Powell emphasising that any such move should not be seen as inevitable.

The Federal Reserve has a so-called dual mandate requiring policymakers to maintain both low unemployment and low inflation. Chairman Powell noted in October that risks to the labour market are increasing, though experts have advised that the ongoing government shutdown has resulted in a lack of economic data, a factor that may be hampering FOMC decision-making. One analyst commented, “A prolonged government shutdown and on-going tariff negotiations continue to introduce significant uncertainty into the immediate monetary policy outlook”.

Experts suggest that the Federal Reserve’s hands are somewhat limited due to the near blackout on economic data.  However, the government did unexpectedly release the September 2025 CPI (Consumer Price Index) figures on 24th October, which showed a 3% annual increase and 0.3% monthly increase, both lower than anticipated. The FOMC remains committed to both sides of its dual mandate, and with economic uncertainty still elevated, has seemingly opted to prioritise employment for now. Inflation, however, remains above target, and if next month’s data (assuming the government shutdown ends) shows an uptick in inflation, it could see renewed tension between the labour market and inflation factions within the FOMC.

Russia Hit with New Oil Sanctions

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Last week on 22nd of October, in Washington D.C, the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) announced that further sanctions on major Russian oil companies were being imposed due to Russia’s lack of serious commitment to a peace process to end the war in Ukraine. Experts advise that the aim of this increased pressure on Russia’s energy sector is to weaken President Putin’s ability to generate revenue for the war effort and to sustain an already fragile economy.

The sanctioning of both Rosneft and Lukoil* by the United States coincided with the EU’s 19th package of sanctions on Russia, which included a ban on Russian LNG (liquefied natural gas) imports. The United Kingdom had also added to its own sanctions list the previous week.

Rosneft – A vertically integrated energy company specialising in the exploration, production, refining, transportation, and sale of petroleum, petroleum products, and LNG. The Russian Government owns around 40.4% of the company, with the Qatar Investment Authority also holding a significant stake.

Lukoil – Engaged in the exploration, production, refining, marketing, and distribution of oil and gas across Russian and international markets. Lukoil is privately owned, with its founder, Vagit Alekperov, holding approximately 28.3%.

President Trump’s sanction package targeting Rosneft and Lukoil has triggered repercussions in the world’s two most populated nations, India and China. Experts report that a number of oil companies in both countries have begun cancelling orders ahead of the sanction deadline of 21st November 2025, fearing potential retaliation from the White House for sanction busting.  Analysts estimate that Russia exports between 3.5 and 4.5 million barrels of oil per day to Asia, with a significant portion coming from the newly sanctioned firms. However, experts warn that once the deadline passes, exports of between 1.4 and 2.6 million barrels per day to China and India could completely dry up.

Under OFAC’s latest rules, U.S. secondary sanctions may also be imposed for providing material support to Lukoil or Rosneft, or for operating within Russia’s energy sector. In essence, sanctions can be triggered by any significant transaction involving these companies. The threat of being banned from the U.S. financial system is expected to deter potential sanction busters from engaging in new or existing business with either firm.

The EU’s new sanctions package will prohibit the import or transfer, directly or indirectly, of Russian LNG from 25th April 2026, except for long-term contracts entered into before 17th June 2025. The EU’s implementation has been slower than that of the U.S. and UK due to its greater dependence on Russian LNG.

Meanwhile, both the European Union and the United Kingdom continue to target vessels operating within the so-called shadow fleet*, which is used to transport Russian oil and bypass Western sanctions. The UK has also imposed asset freezes on several companies supplying Russia with critical electronics for missiles and drones. Additionally, the EU has identified 45 new companies and entities that are directly supporting Russia’s war effort by helping to circumvent export restrictions on advanced technology.

Shadow Fleet – A collection of around 45 ageing, uninsured oil tankers used by Russia to export oil while evading Western sanctions. These vessels typically have opaque ownership structures, often sail under false flags, and operate outside the Western financial system. This enables Russia to sell oil below the Western-imposed price cap of USD 60 per barrel, designed to limit Moscow’s export revenues.

The latest round of sanctions is expected to result in increased enforcement activity and greater regulatory scrutiny, particularly if the United States maintains its renewed aggressiveness. With relatively short wind-down periods for both Lukoil and Rosneft, sanctioning authorities will need to act swiftly and with heightened diligence. Strong cross-border coordination among multinational organisations will be essential to ensure a robust and effective sanctions compliance framework.

President Trump and the Tariff Trade Wars

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On Thursday, 23rd October, President Donald Trump announced that he was halting all trade negotiations with Canada, blaming an advertisement funded by the Ontario Government, which cast negative connotations on his tariff plans by featuring the voice of former President Ronald Reagan. The advert used excerpts from a 1987 speech in which President Reagan criticised tariffs as outdated while defending the principles of free trade. Last year, the United States and Canada exchanged in excess of USD 900 billion in goods and services, and the cancellation of trade talks by President Trump has cast a cloud of uncertainty over bilateral trade relations between the two nations.

President Trump’s announcement, made via his Truth social media stated:

“Tariffs are very important to the National Security and economy of the U.S.A. Based on their egregious behaviour, all trade negotiations with Canada are hereby terminated”.

Experts suggest that the President is convinced the Ontario Government timed the adverts (which have been shown more than once) to coincide with a case in the Supreme Court challenging the legality of the tariffs, and to sow discord among Republican supporters. Canada’s Prime Minister, Mark Carney announced on Friday that the country was ready to resume trade talks with the United States and would pause the advert on Monday in the hope that U.S. trade officials would return to the negotiating table.

In a surprise move, President Trump predicted that Brazil and the United States may be able to “pretty quickly” strike a trade deal, despite having imposed punitive tariffs on Brazil earlier this year over the prosecution of former ally Jair Bolsonaro. Brazilian Foreign Affairs Minister Mauro Vieira stated that he hoped sanctions on Brazilian officials would be lifted and that he expected trade negotiations to be completed within weeks.

President Trump is attending the 47th ASEAN Summit and Related Summits in Kuala Lumpur from 26th – 28th October 2025, where he has held several meetings with regional leaders concerning tariffs. He is seeking to increase access to markets for U.S. agricultural goods and, crucially for his administration, to secure access to critical minerals and rare earth sectors. Such framework agreements will include exemptions from tariffs on key exports to the United States for several Southeast Asian countries, including Cambodia, Malaysia, Thailand, and Vietnam.

The United States has released a framework for a trade agreement with Vietnam, which will offer zero tariffs on selected products while granting preferential treatment by the Vietnamese Government to U.S. agricultural and industrial exports. A White House Statement said the agreement is expected to be finalised in the coming weeks, adding that both countries had agreed commitments on investment, digital trade, and services, though further details were not provided.

It has also been announced that a reciprocal trade framework between the United States and Thailand has been reached, under which the U.S. will maintain a 19% tariff on Thai exports, while identifying certain products where tariffs could be reduced or removed. Thailand will eliminate tariffs on approximately 99% of U.S. exports, covering industrial, food, and agricultural products. Both countries also signed a pact giving U.S. companies preferential access to rare earth minerals, crucial in manufacturing high-tech products such as jet engines and semiconductors. However, information released so far remains limited and given that China controls around 90% of the rare earth market, the overall impact for the U.S. may be modest.

Malaysia, as host of the 47th ASEAN Summit, has signed a Joint Trade and Critical Minerals Agreement with the United States aimed at improving trade across Southeast Asia and countering China’s tightening control of rare earth mineral exports. Analysts say the agreement gives Malaysia an advantage in accessing the U.S export market and, in return, Malaysia will develop its rare earth and critical mineral sectors with U.S firms, while addressing barriers that affect investment, digital trade and services. Furthermore, Malaysia will commit to purchasing products from U.S companies and restricting the export of any U.S. items on the unauthorised list.

Finally, China and the United States are both keen, according to experts, to avoid further escalation of the current trade war, and have shown signs of progress. After China increased export controls on rare earth and critical minerals, President Trump responded by imposing China with 100% tariffs on Chinese goods. However, on 26th October, it was announced that U.S. and Chinese trade and economic officials had reached an agreement on a framework for bilateral trade, and President Trump confirmed that he expects to finalise a trade deal with President XI Jinping in the coming days. Only time will tell whether the United States and China can reach a sustainable long-term agreement.

S&P Global Ratings Downgrade France’s Sovereign Credit Score

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In a move that surprised bond markets, S&P Global Ratings (Standard & Poor’s), one of the world’s leading credit agencies, announced on Friday, 20th October, that it had downgraded France’s sovereign credit rating from AA- to A+. S&P had originally been expected to review France’s rating next month, but brought its decision forward, citing growing fiscal concerns, particularly the suspension of the government’s controversial pension reform by parliament. Last week, the government narrowly survived a no-confidence vote after agreeing to opposition demands to halt President Macron’s pension changes, a political compromise that, according to analysts, preserved the government’s stability at the expense of fiscal reform.

France has now lost two of its AA- ratings in quick succession, with both Fitch and S&P lowering their assessments. Moody’s is scheduled to review France’s credit score of Aa3 (the lowest in the double-A category) on Friday 24th October. Experts warn that French bonds could become more vulnerable as downgrades come faster than markets anticipated. Following S&P’s decision, French government bonds came under pressure, with yields on the 10-year bond rising by three basis points to 3.39%, while German 10-year yields increased by one point. A key gauge of risk — *the French-German 10-year bond spread has widened sharply, nearing 90 basis points earlier this month, up from just over 50 basis points before Macron’s snap legislative election in 2024.

*French-German 10-Year Bond Spread – this is an important indicator of market risk, comparing France’s borrowing costs to those of Germany, the Eurozone’s benchmark “safe” borrower. A widening spread indicates that investors are demanding higher returns for holding French bonds, reflecting increased concern about France’s fiscal health or political uncertainty.

The hung parliament resulting from President Macron’s snap elections on 30th June and 7th July 2024 has created a political stalemate that has driven up bond yields (now among the highest in the Eurozone). These pressures have been further exacerbated by S&P’s downgrade. France’s public debt currently stands at around 113% of GDP, with S&P forecasting it could rise to 121% by 2028. The agency warned that the country’s economic outlook (the Eurozone’s second-largest economy) remains uncertain ahead of what could be France’s most pivotal election in decades in 2027.

Another challenge for French bonds is that, with the rating now below the AA threshold, some funds bound by “ultra-strict investment criteria” may be forced to sell their holdings, pushing yields higher. However, analysts note that most funds will likely continue to hold French government debt. Some fund managers, anticipating the downgrade, have already amended their internal rules, reportedly in response to client demand, to allow holdings of A-rated French securities.

Overall, analysts warn that France faces significant fiscal challenges, including a large public deficit and mounting national debt. Two major rating downgrades in quick succession highlight investor concern about rising borrowing costs. While inflation remains low and France retains economic strengths in services, tourism, and technology, a lack of political consensus on structural reforms and budget discipline is hampering progress. The draft 2026 budget, which includes tax rises and a surtax on large corporations, faces fierce opposition both from parliament and the public, underlining how difficult it will be for the government to stabilise the nation’s finances.

The Global Banking System at Risk from the USD 4.5 Trillion Private Credit Market

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Senior Wall Street figures have voiced growing concerns that the global banking system could be facing serious risks from the USD 4.5 trillion private credit market. The main worries centre on risky lending practices, potential contagion, and a lack of transparency, all underscored by recent high-profile bankruptcies. Because the private credit market operates outside traditional banking regulations, it tends to carry higher leverage and riskier loans, which could spill over into the wider financial system and impact banks and investment firms around the world.

The sense of unease across Wall Street has deepened amid fears that large-scale defaults in the private credit market could trigger a broader systemic shock. Experts note that global credit has expanded rapidly over the past decade, with particularly sharp growth in private credit. Senior finance figures explain that this wave of expansion typically starts with private credit, then extends into high-yield bonds* and leveraged loans**, both of which amplify financial risk

*High Yield Bonds – In finance, a high-yield bond is one rated below investment grade by credit agencies. These bonds offer higher returns but carry a greater risk of default. They are often issued by start-ups, highly leveraged companies, capital-intensive industries, or so-called “fallen angels”, firms that once held investment-grade ratings but have since dropped below the threshold.

**Leveraged Loans – These are high-risk loans granted to companies with weak credit histories or heavy debt loads. Because of the elevated risk, they come with higher interest rates. There’s no strict definition for what constitutes a leveraged loan, but they are generally identified by low credit ratings or large margins above benchmark interest rates, such as floating-rate indexes that determine how loan costs fluctuate over time.

Investor anxiety intensified recently when two major car parts suppliers in the private credit space, both carrying multi-billion-dollar debts, declared bankruptcy amid fraud allegations. At the same time, two regional banks revealed they were sitting on several irrecoverable bad loans. The news sparked a sharp sell-off across both U.S. and U.K. stock markets last week. Analysts said many investors fear this could be just “the tip of the iceberg,” prompting a rush to safer assets.

In the U.K., data showed that within the FTSE 100, investors sold off shares in Schroders and ICG, both seen as particularly exposed to the private credit market. Banking stocks also fell sharply, reflecting concerns that traditional lenders are more deeply tied to this market than previously thought. The International Monetary Fund (IMF) recently warned that global banks’ exposure to private credit, often dubbed the “shadow banking sector”, amounts to around USD 4.5 trillion, a figure larger than the entire U.K. economy. The IMF also cautioned that as many as one in five banks could face significant trouble if the sector deteriorates further.

IMF Managing Director Kristalina Georgieva has publicly admitted to “sleepless nights” over the potential risks stemming from non-bank financial institutions. Financial commentators say her concerns arise from the lack of regulatory oversight in this sector, where non-bank lenders can take on risks that traditional banks would likely avoid. The absence of third-party scrutiny only compounds the problem, leaving markets in the dark about the true scale of exposure. The world learned painful lessons during the 2007–2009 global financial crisis, and with the collapse of Silicon Valley Bank in 2023 still fresh in memory, few are willing to rule out another shock on the horizon.

What Ignited the Recent Record Crypto Crash?

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On Friday, 10th October, just after reaching an all-time high, the cryptocurrency market imploded, wiping out around half a trillion dollars in value. Bitcoin alone lost more than USD 200 billion. Most experts, analysts, and financial commentators agree that the crash was triggered by President Trump’s announcement on his Truth Social platform that he would impose 100% import tariffs on China from 1st November 2025. Following the post, Trump’s own meme coin plunged to USD 4.65, leaving his followers nursing losses of around 40% in a single day. The same coin had recently traded at a high of USD 45.

Leveraged trading has become standard practice among many crypto traders, who borrow money to increase the size of their positions. While such trades can be highly profitable, they are equally risky when prices move sharply in the wrong direction, as they did last Friday. In today’s crypto market, heavily leveraged bets are automatically closed by exchanges once losses reach a level that would make repayment impossible. Experts say this system amplified the crash, as countless traders with high leverage were forcibly liquidated by exchange algorithms once prices began to fall.

Allegations of insider trading have also surfaced after an investor reportedly placed a short position on Bitcoin, earning around USD 200 million when prices collapsed. This trade occurred just 30 minutes before President Trump’s post on Truth Social announcing the new tariffs on China. Many within the crypto community have questioned whether the investor had access to insider information from within the White House. The trader has since been dubbed the “Trump Insider”, particularly after opening another large short position on Bitcoin this week, sparking fears of a second market downturn.

The unwinding of leveraged trades also had a devastating impact on altcoins, leaving the wider market reeling. Ethereum dropped by around 11% to USD 3,878, while Cardano and Solana both fell roughly 30%. Other major cryptocurrencies such as XRP, Dogecoin, and ADA also tumbled by 19%, 50%, and 25% respectively, according to market data. Analysts say stablecoins which are pegged 1:1 to fiat currencies such as the USD, GBP, or gold, are edging closer to mainstream adoption as Congress debates the *Genius Act. However, during the sell-off on 10th October, Ethena’s yield-bearing stablecoin (USDe) briefly lost its dollar peg, plunging to 65 cents on Binance before rebounding to close just below USD 1. Financial commentators say this episode should give Congress some food for thought when refining the legislation.

The *“Genius Act”, passed in July 2025, is a U.S. law that created the first comprehensive federal regulatory framework for stablecoins. It aims to provide clarity and consumer protection by requiring issuers to maintain a 1:1 backing with high-quality assets such as cash or short-term U.S. Treasuries. The Act also establishes both federal and state licensing pathways and includes provisions for financial stability, disclosure of reserves, and legal safeguards for holders in the event of insolvency.

Experts suggest several key lessons can be drawn from the 10th October 2025 crypto crash. Earlier that week, China announced restrictions on rare earth mineral exports, reigniting speculation about a renewed U.S.–China trade war. President Trump’s retaliatory post amplified global concerns, sending shockwaves through financial markets. While traditional markets were closed, the 24/7 nature of crypto trading meant that digital assets bore the full force of the panic almost instantly.

This has been the largest single liquidation event in cryptocurrency history. Data shows that around USD 19 billion in leveraged positions were wiped out in under 24 hours, though some commentators believe the true figure could be higher. Analysts say the episode highlights the extreme risks of trading with leverage in such a volatile environment. The market’s structure also contributed to the collapse, as automatic deleveraging mechanisms at major exchanges like Binance triggered further sell-offs, creating a vicious cycle.

The crypto industry now faces serious questions about its own resilience and governance. The ecosystem is so interconnected that when one segment collapses, the rest often follow. Moreover, repeated allegations of insider trading, including claims that an unknown trader made USD 200 million shortly before President Trump’s announcement, have further damaged trust. To avoid similar crises, experts say exchanges and market participants need to adopt stronger risk management systems and institutional-grade compliance standards. However, given crypto’s historical resistance to regulation, some argue that Congress may need to intervene to ensure proper oversight as stablecoins move into mainstream financial markets.

Silver Soars Above $50 as Squeeze Hits London Silver Market

Written by IntaCapital Swiss on . Posted in News & Reports. Leave a Comment

On Thursday, 9th October, silver breached the $50 per ounce mark for the first time since the 1980s, evoking memories of the Hunt brothers*, before continuing its climb to reach a high of $51.23 per ounce. The surge in silver prices, already up by around 70% since the start of the year, has been driven by investors rushing to safe-haven assets such as silver, gold, and other precious metals, as well as by a surge in demand from India. Another key factor is silver’s critical role in industrial markets, with wind farms and solar panels now accounting for nearly half of global demand.

*Hunt Brothers – Nelson Bunker Hunt and his brother were Texas oilmen whose worldview was shaped by a sense that the odds were stacked against them. With inflation at 15%, scrutiny from the IRS (Internal Revenue Service), and tensions with Muammar Gaddafi, they felt under siege. After refusing Gaddafi’s demand for half the profits from their Libyan oil fields, the Hunts saw their assets seized. Determined to protect their wealth, Nelson Hunt decided to hedge against inflation by hoarding silver, leading the brothers to begin one of the most infamous market plays in modern history.

Experts note that Nelson Hunt was not a typical “buy and sell” trader. Out of paranoia and conviction, he and his brother began stockpiling silver in 1973, when it was priced at just $2 per ounce. By 1980, the price had reached $45 per ounce and was still rising. The Hunts had amassed around 200 million ounces of silver, and the craze spread. People sold family heirlooms, thieves targeted silverware, and anything containing silver was melted down, all of which pushed prices even higher.

The fallout prompted regulators to act. On 7th January 1980, both **COMEX and the Chicago Board of Trade introduced emergency measures, including higher margin requirements. Experts at the time said the new rules effectively outlawed further silver buying, allowing only liquidation contracts. Prices soon collapsed from a high of $49.45 per ounce to $16.60 by 18th March that year. After years of legal battles and financial manoeuvring, the Hunt brothers eventually lost everything.

** COMEX – The Commodity Exchange, a division of the CME Group, is a global derivatives marketplace that allows clients to trade futures and options across major asset classes. It also provides clearing and data services and serves as the main exchange for trading metals such as gold, silver, copper, and aluminium.

Fast-forward to the 21st century, and the London Silver Market is experiencing what many describe as a historic squeeze. As prices continue to rise, the mismatch between supply and demand has become so severe that a global hunt for bullion is underway.

Some traders are even booking space on commercial flights from New York to London (a costly method) to transport silver bars and take advantage of the $1.20 per ounce arbitrage opportunity seen on Monday this week. The shortage of silver bars has been fuelled by several factors, starting with Donald Trump’s threat to impose tariffs on the metal. This prompted a mass exodus of bars across the Atlantic as traders rushed to beat potential levies.

Other contributing factors include a spike in demand from India, increased debasement trading (where investors sell currencies and buy safe-haven metals as global debt climbs), and production shortfalls among miners who are failing to keep pace with demand. Additionally, large volumes of silver are held in vaults underpinning ETF trading, meaning they cannot easily be sold or leased. The leasing market has become so tight that traders holding short spot positions are paying sky-high rates to borrow silver to roll over their contracts.

Market analysts in London believe that natural momentum will eventually see silver bars flow back to the city from reserves elsewhere, helping to ease the shortage. However, traders in New York remain hesitant to export silver to London, as the US government lockdown could cause customs delays, potentially costing millions in missed opportunities. There is also widespread caution over President Trump’s potential tariffs on silver, which is under investigation as a critical mineral under Section 232. Should the US decide not to impose tariffs, part of the squeeze in London could ease. The coming four to six weeks will be crucial in determining how this tightness in the London silver market unfolds.

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