Will Bond Markets Force Fiscal Repair?

Sovereign debt — the money a country owes to domestic and foreign lenders — has reached levels that are increasingly shaping economic policy and market dynamics in developed economies. After years of low interest rates, pandemic spending, and rising costs linked to energy, defence, and social programmes, debt burdens are now colliding with higher borrowing costs. In some countries, average interest rates on debt are beginning to outstrip growth rates, raising fears of a “snowball effect” where governments borrow simply to service existing obligations. While a full-scale debt crisis is unlikely in the near term for major economies, the risks to fiscal stability, market confidence, and long-term growth are mounting.

This webinar, the second in the FT–Schroders series linked to the Business Book of the Year Awards, will explore the macroeconomic, market, and political consequences of elevated sovereign debt. Drawing on the expertise of award-nominated authors, economists, fund managers, and political analysts, the discussion will examine what sustained high debt means for investors, the stability of the wider financial system, and the domestic political landscape — including the potential for populist movements and policy shifts. It will also address how geopolitical tensions, from trade wars to regional conflicts, interact with debt risks in shaping the global economy.

Fiscal choices

How will rising debt costs shape government spending and taxation?

Market pressures

What risks do higher yields and bond volatility pose for investors and banks?

Political consequences

Could debt burdens fuel populism and shift policy priorities?

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