'Bifs' replace 'Piigs' as Europe's bond market whipping boys
Summary
Since the Iran war broke out on 28 February, Britain, Italy and France — the new 'Bifs' — have seen their 10-year government borrowing costs rise by 0.45 to 0.5 percentage points, more than any other major European country. Investors are punishing the trio hardest because they combine already-stretched debt-to-GDP ratios with upcoming spending pressure on defence and energy independence. The UK priced a record £15bn syndication at 4.91%, the highest on a 10-year sale since 2008.
Delfineo's Take
The real signal isn't the absolute yield move — it's that UK gilts and Italian BTPs now correlate at their highest level in decades. Bond investors have started treating the two countries as a single fiscal vulnerability trade, echoing the Piigs grouping of the 2010s. France, once firmly in the 'core', is being pulled into the same basket. For European equity valuations, this means a higher discount rate for longer, regardless of what the ECB does.