Bond Vigilantes are bond investors who protest structural government debt by selling bonds, increasing real yields. This increases the costs for government to borrow, allegedly causing a decrease in expenditures and ultimately a decrease in structural deficits. Models are presented which capture this effect, and offer evidence that these mechanisms have occurred over the past 50 years.

This paper builds on recent research utilizing real time datasets in order to assess the forecasting utility of consumer sentiment indexes in the United Kingdom. Academic researchers have consistently found that consumer confidence indexes accurately predict consumer spending in the near term. Few of these examinations, however, have utilized out of sample forecasting and only one has incorporated real time data.