UK cost of borrowing falls on Brexit vote

Yesterday in the markets UK government prices surged, with an overall rise of nearly 5%. This was despite the fact that they had already risen considerably this year ahead of the Brexit vote.

The UK government can now borrow at just 1.08% for ten years, and for under 2% for 30 years, the lowest rates in living memory.

A rating Agency has meanwhile put our debt on watch for a possible downgrade, despite this strong wish all year by the markets to value our debt more highly.

Far from the UK facing a crisis in borrowing for state purposes, or having to pay higher rates as some feared, the rates have tumbled further. As a sovereign country the UK state has full powers to raise tax and to create money to honour all debts.

When Moodys downgraded UK state debt from AAA to AA1 in 2013, the last actual downgrade, they said

“The UK’s creditworthiness remains extremely high because of the country’s significant credit strengths.” They then drew attention to European risks, highlighting “the considerable risk exposure through trade and financial linkages to a potential escalation in the Euro area sovereign debt crisis”.


Yesterday Moodys rightly stated that out of the EU the UK needs to “largely replicate” its current access to the single market. That is exactly the aim of UK policy, with many on the continent also wanting largely the same access to the UK market after exit.


  1. Newmania
    June 25, 2016

    John , did you seriously expect the word to end on day one?. It takes time for the stop in investment to work through and the plans to cut back jobs to happen.2008 was a very slow motion car crash indeed and this is very different disaster
    I start to wonder at what stage you are going to admit you have done a terrible thing , how many jobs lost will it take , can we set a number , how much loss of growth?
    What will you do then , ” Good news House Prices down..”
    We are due to have another election soon and by then it will be clear that your lies were indeed lies . Turkey is not joining the EU , there is no easy answer to immigtration and there is certainly no £350m extra for the NHS . All lies as was the lie that would have the good will of our Eurpean neighbours
    It is now quite clear we are about to endure the puinishment beating of our histoiry and the problem you , as an acedemic , will not understand is that delay makes it worse
    For all the loathign dirtected at this country now is our best chance . How do I know , because that what I am doing .

    No-one will be investing planning or doing anything positive and the weaker we get the worse it gets . I`m amused that you feel you know better than the creidt agencies but they follow the news . Whwn the affect on grorth is clear then the suffering will commence and then Scotland will leave
    Will someone remind what this was for ?

    Democracy , will you please promise me to tell at least onme unemployed man that he is free , to his face

    reply I always made honest account of the sums involved, and set them lout in my proposed Brexit budget. No-one knows when Turkey will join the EU. I reported faithfully that the EU has recently signed a comprehensive Association Agreement with Turkey and has waived visa for entry to the Schengen area for Turkish citizens. I also pointed out we are helping to pay for the accelerate talks and making a contribution to improving the Turkish borders. If you wish to criticise the facts please criticise the ones I cite!

    1. Newmania
      June 25, 2016

      You are not in a position to propose a budget . You did not disassociate yourself from the lies told by your side on additional moneys , immigration and as for Turkey are seriously pretending there was secret plot you have discovered whereby Turkey was joining ? No.End of ; and the whole strategic question of Turkey, which is complex , shoudl enever have been reduced to a scare story about immigration by any responsible poltician
      The EU are nw taking our notification that we intend to leave as invoking the treaty and they may have appoint it was never intended as an endless window . Have you no sense of the hatred we have not provoked ? Why did you deny this obvious consequence ? You had better wake up to the damage you have done quickly.

      We here can do only one thing and that is unite against new out MP Maria Caulfield and make her pay for this disaster. I am already active in the “ Get her out “ cause combining Labour Liberal Green and disgusted Tories like me . The chance will come later this year when people realise what fools they have been
      She will take the blame here , as for others I can only hope they follow our example

      Scotland are already making their move .

      What a mess

    2. hefner
      June 25, 2016

      It is rather curious that within the Leave group, nobody appears to know about the article 88-5 added to the French constitution in 2005 at the time of the constitutional treaty, thereafter updated in 2008 for the Lisbon treaty, which gives the right to the French Government to call a referendum and following such referendum to veto any new country wanting to enter the EU.
      Given the present opposition of the French to Turkey’s accession, I would have thought it is a hurdle worth mentioning.

      Moreover, even if Turkey were to access the EU, it would take roughly seven-eight years before Turkey citizens could become “EU” citizens (the seven to eight years period varies from EU country to EU country) and as such get free movement within the EU.
      The present Association Agreement including visa waiving for Turkey citizens entering the EU does not give EU citizenship or accelerate in any way the accession procedure for Turkey.

      One can obviously claim that Turkey citizens will now fill up the Jungle in Calais, and that it will increase the potential risk of migrants from Turkey illegally entering the UK.
      I would think that the above might very well qualify as facts.

    3. libertarian
      June 25, 2016


      Have you ever been to the UK ? I’m just wondering as you dont seem to know very much about what is actually happening here. On your jobs nonsense , you seem to be blissfully unaware that unemployment went DOWN again this quarter, that we have the lowest rates of unemployment in the EU, that we are on course to create another 1.8 million new jobs.

      I can’t speak for other businesses , but I’ve just invested in 4 new premises, I’m hiring like mad and am about to experience another record growth ( 27%) year in my businesses.

      You haven’t provided a shred of evidence to back up any of your predictions. They sound like its what you WANT to happen so that you can prove you were right and the leavers were wrong. It isn’t going to happen

      You ought to be practicing your back story for a few years time when your predictions fail to materialise and most remainers will deny ever voting to stay

    4. zorro
      June 25, 2016

      Newmania, I think that it was your poster boy, Gideon Osborne, who was claiming that the world would fall apart the day after (redundancies start the next day, emergency budget etc). By the way, have you seen or heard of him recently?

      You have this rather bizarre manner to ask for JR to come up with accurate statistics to justify your lurid remainian fantasies.

      Turley not joining the EU – Oh I see, is that why the UKG is spending mega sums of UK taxpayer money to support accelerated entry and why the British Embassy is promoting accelerated entry as government policy? Please enlighten us…

      The £361m per week refers to the gross sum that we give to the EU. When we LEAVE we can do what we want with that money. I don’t remember seeing an explicit staement thatt ALL of that money would be spent on the NHS. But hey, an independent can spend what it likes on the NHS 🙂

      Which article of the Lisbon treaty allows the EU to issue punishment beatings? Grow up…

      Credit agencies always get it right do they? Er no, even the sainted Moodys and in a rather contrary fashion if you read their 2013 rationale for the assessment!


    5. Richard1
      June 25, 2016

      Newmainia, You are right that 1) Turkey joining the EU is inconceivable in the foreseeable future, this was a red herring 2) ‘£350m per week for the NHS’ was misleading to the point of lies and 3) that Leave had & has no answer on immigration. The reason Leave has won is because most voters for Leave want immigration down – as promised by Nigel Farage – to c 30-50k p.a., an inconceivable result (unless project fear turns out to be right and we are in fact now headed for economic contraction).

      So there was lots of disingenuous rubbish from the Leave side (although JR was always scrupulously accurate).

      But you miss the two main issues in the vote: there is no need for governmental Union in order to have friendly political relations and free trade; and the Eurozone is heading either for collapse and therefore big financial losses or for further integration – neither of which the UK wants to be part of.

      1. Richard1
        June 25, 2016

        Where is the second Lord of the Treasury and are we going to hear from him?

        1. zorro
          June 26, 2016

          He is in his bunker making a ‘Downfall’ video! Search parties will be sent out in good time.


  2. a-tracy
    June 25, 2016

    Our newspapers and media have a responsibility to report this instead of whipping up the youth until one of them does something silly. Do they not see it is them that keep people in a constant state of fear.

    The last thing the UK needs is a protracted and argumentative Tory leadership contest. This needs to be organised quickly and smoothly and positively, with someone that wants to LEAD this transition, working side by side with Cameron from tomorrow. You can’t afford to wait until Monday you need people that had their hearts and minds in the Leave campaign on social media now. You need to prove this is about Britain not about political shenanigans.

    1. zorro
      June 25, 2016

      Cameron needs to cooperate.


  3. Antisthenes
    June 25, 2016

    The UK has a very strong hand when it comes to trade. Far more EU jobs are at risk than UK ones if a decent trade deal is not agreed. After all even stayers maintain we are only in the EU for trade not political and economic union. So when we do have a decent trade deal then everybody is happy or should be unless they are liars and did want more than trade.

    The stayers are screaming blue murder now they have lost. Even want another referendum. So the attraction of the EU for stayer is now obvious it actually already was they do not care much for democracy. It gets in the way of getting what they want when they want it. Much better non elected Brussels technocrats and experts telling us what to do than us telling elected politicians at Westminster what they should do. Pesky democracy it does stop the left, progressives, SJWs and other assorted loonies getting their way all the time.

    Of course the EU is also very supportive to some groups especially those ones who favour legalised theft. The EU does forcibly remove UK taxpayers money and give it to those who they favour and in turn favour the EU. So of course any threat to that scam is going to be ill received and vociferously opposed.

  4. Excalibur
    June 25, 2016

    You should actively pursue the role of Chancellor in the new Brexit government, JR. Few have the experience and grasp of the financial stratagems that you have. Perhaps you should indicate to the incoming hierarchy your willingness to serve in this role, if indeed that is the case. Your talents would be wasted on the back benches. We need your shrewd mind to disentangle us from the EU tentacles.

    Reply I would be happy to do that job but it will not be in my gift!

    1. eeyore
      June 25, 2016

      Your reply gives me hope and pleasure, Mr Redwood. Right now the game of Fantasy Cabinets is almost unavoidably seductive – but no, one must resist. For the moment. Enough to say I believe that from the personnel available to Mr Cameron’s successor, a superb team can be assembled fully equal to the scale of this historic national occasion.

    2. Richard1
      June 25, 2016

      I would second that. We really need top quality people in the driving seat & it would be great to see JR back in some more central capacity than Welsh secretary.

      We also need rapid implementation of market friendly policies – tax simplification etc. In order to shore up confidence. I would also like to see a strong statement that all those non-UK citizens now in the UK will be able stay as long as they like and that any new points based system will ensure that we continue to welcome law-abiding workers and students from other EU counties. There are a lot of people who live and work here and make a great economic and cultural contribution who are wondering what their future is.

      1. zorro
        June 25, 2016

        Agreed and this is all we ask. Sensible controlled immigration with no automatic entitlement to settlement.

        So can we work together to make this work? Some people have lost their senses with what they are writing about apocalyptic scare stories for holidaymakers!


    3. Ken Moore
      June 25, 2016

      Indeed Dr Redwood is 100% the right man at the right time to be Chancellor.
      Surely the party leadership can see the job right now needs someone with the right track record and experience….not just another wonk with a burning desire to wield power and climb the political ladder.
      To me it’s always been a job for a more seasoned senior’s just too important a brief to be left to the hot headed and inexperienced Gideon types that talk a good game but don’t stand up to scrutiny.

  5. Antisthenes
    June 25, 2016

    The total cost of Brexit will depend on those who do the negotiations for the split and the will of parliament. It is now in the hands of our politicians and civil servants. It does not fill me with confidence as I know in some quarters mind set, intelligence, knowledge and competence is sadly lacking.

  6. Brigham
    June 25, 2016

    The BBC is constantly telling us that the pound has fallen, and that means higher cost on the high street. Not a mention of the fact that a lower pound means cheaper exports from our country. I myself would like to see a new scottish referendum. It would mean an end of the whining SNP in parliament.

    1. formula57
      June 25, 2016

      Don’t forget, the £ may fall on the FX market, but that will not affect the pound in our pocket, as Old Labour used to say!

      1. hefner
        June 25, 2016

        … yes, as long as you don’t need for business or pleasure to travel on the continent.

    2. hefner
      June 25, 2016

      Well maybe, but this morning there was a long queue of people wanting to fill up, as petrol prices are likely to go up, maybe as soon as on Monday morning.
      And if you were to look at the UK pound/US dollar not since February 2016 but over the last two years, you might see a trend, idem for the FTSE100 (not particular sensitive to UK affairs) and FTSE250.

      It might be time not to believe everything JR is saying. After all, he is just part of the elite or the experts that most people have just voted against.

      Think for yourself! You know, it does not hurt.

      1. zorro
        June 25, 2016

        We have never high prices, inflation, dearer petrol prices before because the EU has protected us….. Seriously, please get a grip!


        1. zorro
          June 25, 2016

          Have you seen Gideon Osborne recently? We shall have to send a search party soon!


        2. hefner
          June 25, 2016

          Funny, we are being told of the fluctuations of the various FTSEs, the $/£ exchange rate, the petrol price linked to various world events, and all you refer to is the failure of the EU to protect us.

          I am afraid that in the coming months, as we get out of the EU tentacles, there might still be a lot of fluctuations independent of the EU. What about the Donald becoming president?

          Really funny how some contributors here are so protective of their JR.

          1. zorro
            June 25, 2016

            Yes, Donald Trump will be President if he gets more votes than Hillary Clinton, that’s a fact 😉

            Precisely, because we have had horrible recessions, and crrency/price fluctuations whilst in the EU! Remainiacs would have you believe that there was no risk staying in the EU.

            There is always risk in the world, but we will be more flexible, nimble to deal with events instead of a lumbering dinosaur like the EU. We will also not be on the line for bailouts from the Euro problems in the future. All this over time allied with other factors will make us more attractive to inward investment.

            I can assure you that JR does not need my protection, and it is still lawful to agree with his point of view!


  7. Tad Davison
    June 25, 2016

    The low cost of borrowing is important and will undoubtedly be an important asset in a trouble-free transition away from the European Union, but it’s just one strand of an overall multi-filament economic strategy. Our nation’s creditworthiness is vitally important, and we need to have the best people in the highest offices in the land to give stability and confidence.

    There will soon be a vacancy for the position of Chancellor of the Exchequer. We need to replace one Chancellor who has totally blown his credibility and in whom the nation no longer has any trust, with one who has that trust and credibility in spades. Preferably one with previous ministerial experience who has worked outside the world of politics and perhaps fittingly, within the banking and finance industry. And certainly one who does not secretly harbour EU sympathies, or any secret allegiances to certain banking institutions who would have preferred a different outcome in the recent referendum.

    They should also be caring and recognise the impact their policies have (as Winston Churchill once alluded to) upon ordinary working people, as in creating asset price bubbles and unaffordable housing.

    That narrows it down a lot.

    If John isn’t up for it, then I suggest the position is given to one of the outstanding star performers of the Brexit campaign, Andrea Leadsom.

    Tad Davison


    1. zorro
      June 25, 2016

      John/Andrea would both be excellent choices.


      June 25, 2016

      Tad Davison:
      Agreed. But with the likes of John McDonnell Shadow Chancellor as an opponent it would be like using a sledgehammer to crack a nut don’t you think?.

      June 25, 2016

      Tad Davison:
      It would be wonderful if the following would not be in Parliament at all ever again:-

      1.The Rt Hon David Lidington ( Minister of State for Europe ) who spoke for eons with assurances in infinite detail of how the Referendum Campaign would be conducted fairly.
      According to the press he has been traced 25th June, to Luxembourg.

      2. All who sat aside of the above on Parliament’s benches with less than concealed grins as he pontificated.

      3. The Rt Hon James Brokenshaw, Immigration Minister:( No need of explanation )

      4.The Rt Hon Mr Osborne, Chancellor of the Exchequer, for his overall conduct during the Campaign.

      JR should be employed in addition to his Parliamentary duties in a non-political but highly paid role as Chief British Negotiator with the EU and Head of a non-political team for seeking further trade deals with the rest of the world….ongoing.

      Reply I would not want another public sector salary to negotiate for our country.Taxpayers already pay me as an MP.

  8. Denis Cooper
    June 25, 2016

    I haven’t seen any reason to mention this before, as I’m hardly unique, but I’ve had heart problems over recent years, and having left the house at 05.30 yesterday morning when there was still a chance that Remain would prevail I basically spent most of the day stuck in a room with five other men with one of them repetitiously complaining to anybody who would listen about the result of this “election” and saying that many Labour voters were idiots, he knew that because he was a longstanding Labour party member.

    As we all had various heart conditions it didn’t seem a good idea to start an argument which might lead to somebody popping their clogs there and then, so I just kept quiet and read my book. I could have said “Maybe it’s precisely attitudes like yours which have contributed to people voting the leave the EU”, but I didn’t, I bit my tongue.

    That was apart from when I asked the male nurse who was Portuguese why he thought he would need to get a new passport. It turned out that at present he hasn’t got a passport at all, and he had come to work here on some other travel or identity documents, despite the fact that we had been repeatedly assured that as we are not in Schengen we did control our borders and passports were checked. I didn’t add fuel to that small fire by asking him whether it was conceivable that at some point he might perhaps want to travel outside the wonderful EU, even if it was only a holiday in Thailand.

    Out of the six patients in that ward in a London hospital we were the only two who were evidently “old English”, with three being “new English”, though indistinguishable from the “old English” in their speech, and the sixth saying that he was Portuguese but without needing the Portuguese nurse for any translation purposes.

    Only a minority of the staff were “old English”; somebody helpfully explained this was because the UK is incapable of training enough members of its established population to become doctors and nurses and other hospital staff, so unless we swipe such trained people from other countries the NHS will collapse.

    Now that we are leaving the EU I trust that the government will not do anything stupid like deporting the superb day nurse who among other things had the joy of “prepping” and afterwards repeatedly inspecting my groin (West Indian), or the nurse who took over from her in the evening and only had the privilege of inspecting it (somewhere abroad with a Chinese population), or the surgeon who left it rather bruised (German), or the pharmacist who unnecessarily delayed my discharge (Chinese again), etc.

    Anyway whatever the outcome of the referendum I had already decided that I will have to further scale back my political activities, already down from delivering well over 10,000 leaflets when I was the UKIP candidate here in 2001 to only being able to manage about 100 for the this referendum. I’m just glad that the referendum has turned out the right way so that I can do that with an easier conscience.

    1. Tad Davison
      June 26, 2016

      That’s something else we have in common then Denis. I haven’t mentioned anything about my own condition either. I really hope you get well soon, but just to console you, I’ll paste the reassuring and welcome contents of an e-mail I received from a friend and former Premier League Football manager who had open heart surgery not too long ago. It isn’t private and confidential otherwise I’d never let other people see it.

      ‘Hi Tad…

      If and when you go thru that process, you will be in very safe hands.. Surgeons do 3 or 4 of those operations each day of their working life. I had no fear whatsoever when I was about to go into the theatre.

      So rest assured, everything will be very straightforward and most importantly it will make you feel 100% fitter and prolong your life by up to 30 years !!!!



      I replied, given that I am 58, I think I’ll settle for that!

      Yet despite having two of the best heart hospitals on the planet right here in the fair county of Cambridgeshire (Papworth and Addenbrookes) there is presently so much pressure upon the system, they are running at maximum capacity and struggling desperately to keep up. That has its own commentary!


      1. Denis Cooper
        June 26, 2016

        Thanks, Tad. I’ve been to our “local” hospital in Slough but after months of going to and fro they have finally off-loaded me to the Royal Brompton in London. As you say I have a lot of confidence in them, the real problem is transport arrangements especially with the difficulty of my wife driving there and finding somewhere to park so she can pick me up afterwards. There is a good chance that it won’t be necessary to open up my chest, as the German surgeon is one of the leaders in the field and I may end up with just a badly bruised groin as with the diagnostic procedure on Friday.

        1. Tad Davison
          June 26, 2016


          Been there, done that, got the stents!

          Not sure what the next step is for me, hence the reason I asked my friend about his own experiences. I do know this much however, I am supposed to avoid stress, but when I hear some of the bilge being spouted, especially at the present time, I can’t help getting hot under the collar.

          I read a good article earlier on of all things, a left-wing website, that really took the BBC apart for their neo-liberal coverage of the referendum and the whole EU debate. The most trusted broadcaster will stop at nothing to try to get their own agenda across and stir the pot. Perhaps a new administration in Downing Street might bring them to heal where others failed, and my blood pressure drops accordingly.


  9. Ken Moore
    June 25, 2016

    Already the media and the politically correct mob are talking up the prospect of another referendum…these people love democracy but only when it suits them.
    Then they have the nerve to link the OUT campaign with fascism.

    The message is white working class that used to be the ‘salt of the earth’ .. now the ‘scum of the earth’ to the chattering classes..the lefties are hopping mad that this group with no special victim status have been given a voice.

  10. Denis Cooper
    June 25, 2016

    I see that bad losers have been flocking to sign a pre-existing, badly worded, petition for the government to belatedly set a rule that “if the remain or leave vote is less than 60% based a turnout less than 75% there should be another referendum”:

    “Pre-existing” because contrary to some newspaper reports this petition was not started yesterday morning in response to the referendum result, as can be seen from the fact that it has a deadline of November 25th and six months before that would be late May, and it can actually be seen in the coded petition details that it was May 23rd.

    “Badly worded” because it is unclear what would have happened if the vote one way or the other was more than 60%, say 90%, but the turnout was below 75%, say 74%.

    And “belatedly” because by May 23rd it was already far to0 late for the government to introduce that kind of rule. It was done for the 1979 referendum on whether Scotland wanted a devolved assembly, but that had been put into the Act.

  11. Bert Young
    June 25, 2016

    At the moment the focus of attention is on this country and the dire consequences of our leaving the EU . There should be equal attention given to the EU countries who have been and still are involved in trading with us . They certainly face severe damage to their trade and employment levels if they decide to curtail the existing relationships ; it would not be in their interests to cut things off if Brussels decides to direct them to do so . Spain is about to face the beginning of its summer tourist trade and will suffer enormous damage if the exchange rate on the Euro varies a great deal upwards .

    Germany will probably lead the way by insisting that trading relationships are sensibly maintained followed by Holland and France . These checks and balances will take time to secure for them as much as for us ; Juncker can shout as much as he likes but he lacks the real underlying clout . Things are very tight in the EU and the room to manouvre is very limited . Apart from all the economic shouting there is the strength and size of our Armed Forces ; the EU relies on our participation in NATO and will be very careful in what it says and does to maintain our continuing participation .

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