Liability-driven investment (LDI) strategies have been employed by some defined-benefit pension schemes to put leverage behind gilt holdings to help close funding gaps that had emerged in the previous prolonged period of low and falling interest rates. Hedges lost value as the sharp spike in bond yields triggered margin calls, which pension funds tried to meet by selling more of their gilts held outside of the LDIs. This set off what looked like a self-reinforcing spiral in longer-dated yields, risking a liquidity crunch that could have triggered the collapse of certain schemes. Life insurers look less exposed to such a liquidity crunch. But they continue to suffer from a fall in the value of the assets they own in the market sell-off. We fear this process may yet have further to run. Still, current market conditions should provide opportunities for better returns on capital over time. The Bank of England stepped in to safeguard financial stability. But buying bonds in a situation where the underlying cause of the market squeeze is, in important part, a series of substantial proposed tax cuts by the new Chancellor that are anything but small along with steps that weaken the institutional framework underpinning fiscal discipline, is fundamentally at odds with the need to tighten monetary policy to bring inflation back in check. The intervention is therefore intended, and communicated to be, only a temporary fix. In a concession to markets, the Chancellor has now brought forward the timing of the publication of his medium-term fiscal plan, in which he must be aiming to demonstrate his commitment to fiscal discipline against the scrutiny of the OBR. For now, markets look unconvinced that this will be achieved, so yields have risen even further, adding to the cost of government funding. The move in fixed income markets has, most likely, exacerbated the poor performance of UK equities. Our concern is that, unless the root cause of eroding fiscal credibility is addressed, collateral damage could extend to the valuation of more illiquid assets too, including the housing market. A marked correction there would have implications for numerous parts of the financial sector, including life insurance, but also for the wider economy and, in time, for monetary policy. Conversely, most recently, there have been media reports of a possible U-turn by the government. If it is perceived to go far enough by markets to restore fiscal credibility, this could improve the outlook for numerous assets.