UK Not Alone in Risking Another ‘Liz Truss Moment,’ Ashmore Says

Mark Coombs, chief executive of asset manager Ashmore Group, warned that countries running fiscal deficits and relying on market funding—including the UK—are “definitely” at risk of another ‘Liz Truss moment,’ saying a loss of investor confidence could do more than reprice debt and may trigger a buyer’s strike in parts of the yield curve; he suggested the UK could be approaching such an episode, highlighting the vulnerability of fiscally reliant sovereigns to sudden market-access shocks.

Analysis

Mark Coombs, CEO of Ashmore Group, warned that countries running fiscal deficits and depending on market funding—including the UK—are “definitely” at risk of a repeat of the 2022 ‘Liz Truss moment,’ explicitly citing the potential for renewed market turmoil tied to loss of investor confidence. He highlighted that such a loss of confidence does more than reprice debt: it can precipitate a buyer’s strike in segments of the yield curve, impairing market access for sovereign issuers. The commentary directly links sovereign funding vulnerability to abrupt liquidity and pricing dislocations in credit and bond markets, a theme consistent with the signals showing moderately negative sentiment and a measurable market-impact score (0.35). Investors should treat this as a cross-cutting risk across fiscal policy, sovereign debt, interest-rate sensitivity and investor positioning, with the UK singled out as a country to watch given the prior 2022 episode and current deficit reliance.

Key Decisions for Investors

• Monitor sovereign auction demand, short-term funding metrics and fiscal deficit trajectories for the UK and other market-funded governments as early-warning indicators
• Reduce duration risk and shift allocations toward shorter-maturity, highly liquid government paper if auction coverage or secondary-market liquidity weakens
• Establish defined hedges for sovereign exposure (e.g., sovereign CDS or curve-protective strategies) and set clear stop-loss/triage rules to limit losses during a potential buyer’s strike
• Increase cash and liquidity buffers and avoid adding concentrated exposure to fiscally reliant sovereigns until market-access risk demonstrably abates