When the cost of ten year borrowing for the government hit 4,38% for a very brief spike in September 2022 Rachel Reeves claimed Liz Truss had crashed the economy as this would put up interest rates. At the same time as a budget which announced a bigger deficit the Bank of England was putting up base rate, threatening more rate rises, announced a huge sales programme of government bonds and watched as the pension funds geared bond investment plunged causing another big wave of selling. The  Bank quickly reversed the bond market fall by buying up some bonds, The ten year rate was down to 3.1% by November. A change of Chancellor cut the deficit a bit.The Bank after the event agreed its actions were mainly responsible for a lower  the bond market
The ten year rate is now 4.68%.No hint from the Chancellor she has crashed the economy or upped the mortgage rate. This time you cannot blame the Bank for much of the fall as it is easing short rates down and is not going to up its sales.Nor can you blame pension funds and LDI as those have been reined in. This is about the impact of the budget which increased borrowing, hit confidence and undermined the growth rate.
Now the Chancellor is in a bind. Interest  charges will now be higher on state debt, so her leeway in hitting spending and borrowing targets has gone.If the economy stays slow growing the government will need more tax rises and or spending cuts. More austerity will keep growth low.
January 8, 2025
Maybe Rachel’s choices were very limited, or maybe she is just incompetent.
January 8, 2025
So Thieves will double down on the problem by increasing taxes again thus depressing the economy and lowering the tax take. This will create a doom loop which will either mean swingeing spending cuts or a phone call to the IMF. This will create austerity on a grand scale.
January 8, 2025
Swinging spending cuts are not in this government’s DNA. Even less likely would be any downsizing of government departments. Looks like we are stuck with incompetent incumbents for the foreseeable future.
January 8, 2025
Yet another excuse for more tax raids …. as if we ever needed any alleged black holes for labour to increase our taxes and waste more of our hard earned money!
If the Chancellor wasn’t so incompetent It would appear to be a deliberate move by the government to raise tax income in order to make sure we couldn’t afford any EV’s or summer holidays.
With stagflation looming labour have only one tool. They will continue to beat us with the stick of taxation — NO carrots for us!
January 8, 2025
Gridwatch 4pm. Demand 45.4gw. CCGT on 100%, nuclear on 100%. Wind history 7% and dropping. STOR diesels and CCGT on load
10% imports. Absolutely nothing left in the locker.
January 8, 2025
It is reported that more towns will be turned into 20MPH zones – Stevenage and Baldock included.
It’s laughable that we are told councils are consulting on these changes, because it is very clear that any opposition to these suggested moves will be totally ignored, as the decision has already been made!
DEMOCRACY in action — Ha.
Next they will impose 15 minute cities….. and that’s no joke, all part of netzero.
January 8, 2025
Good afternoon.
Well many here and elsewhere predicted this would happen. So she cannot say she was not warned, assuming she was listening.
If this carries on there could well be a run on Sterling. Confidence in the Markets is King.
January 8, 2025
We knew this government would be a disaster, sadly they have exceeded all expectations. I gather it will be, watch this space.
January 8, 2025
Chancellor aims gun at her foot, pulls the trigger. Bang!
Who’d’a thought that would happen?
January 8, 2025
No great suprises here Sir John. It’s pretty been obvious that rates would head this way ever since Ms Reeves announced her “Growth” budget. Looking at her in PMQs today, things are not going to get better either…
January 8, 2025
Sir John
As we have a more ideological team of the HoC Socialist at the helm is it any surprise they are taking the same path as we have seen in the last 14 now 15 year-ish with just more zeal and gusto. We have been brought to the brink with the highest debt, borrowing and tax take we have seen in many, many generations.
As team TTK need, that is need, to finish the Cameron, May, Johnson and Sunak’s job for them. They need to force the people of the UK to seek salvation on shabby terms with the unelected unaccountable EU Bosses – the very people they and the previous crews where enamored with. All of them knew that wouldn’t be acceptable to the hard working, self-reliant and resilient majority off the UK, so the rug had to be pulled from under them.
Farfetched? However else can anyone explain the illogic behavior of Parliament and its fight with the UK People.
January 8, 2025
With the 5 year terms of wrecking now embedded without the possibility of seeking of the shareholders the UK.plc approval any Government in the UK can cement an irreversible future on the Country uncontested.
January 8, 2025
And today, the TTK team are in talks to giveaway UK Sovereign Territory to people that have never had an interest or resided there without talking to the Chagos Islanders, the last and only people to reside there. The to rub it in on his ‘say so’ the Chancellor will have to find as much money as the recipient needs and wants to take it of his hands from the Taxpayer.
There is an urgency to piss-off Trump before he takes office.
To suggest that the TTK team is in anyway unsure or are incompetent, is stretching things they know exactly what they are doing. The know they can intact irreversible changes and have a 5 year term to get it all done.
There wont be a vote on taking EU Laws rules and taxes. TTK has brought in Olly Robbins the architect of us not leaving the EU to ensure we are re-embedded.
No one should TTK has does not have a plan it is clear he has.
January 8, 2025
!”.. correction. No one should suggest TTK has does not have a plan, it is clear he has.
January 8, 2025
Fortunately Parliament is sovereign and nothing is irreversible.
January 8, 2025
Sir John
Are you suggesting that the PM and the Chancellor are incompetent, not up to the Job! Or isn’t in reality always the plan.
January 8, 2025
Think further, if the suggestion is that the Government hadn’t thought things through, they all have Civil Servant as advisers, the Treasury with top dollar paid economist all guiding them through. Government for all we like to categorises them as ‘one man’ teams have an army of high paid advisors, experienced(?) even, behind them
January 8, 2025
1730hrs electricity demand 47gw. 13% imports being bought at ÂŁ1309 per mwh. Absolutely lunacy presided over by net zero zealots. Wind 2.54gw
January 8, 2025
Labour governments always crash the economy, what’s new?
January 8, 2025
Good Evening,
As one or two other contributors have noted, 10 year Gilts have risen in yield quite a bit recently, but they are at about parity with US Treasuries. Noteworthy, Sterling has dropped from 1.32 to 1.24, so markets are indeed paying attention to Ms Reeves, and clearly confidence is jittery. I expect Gilts will need to yield quite a bit more than US Treasuries to keep interest in buying them, so Reeves is going to have a problem; she needs to borrow more to pay for bad policies in Net Zero, the NHS, public sector pay, and that’s before being forced to spend more on defence, and that increased borrowing is going to cost a lot more.
Times are going to get difficult for Starmer, and none of his pretend EU ‘friends’ are going to help.
January 8, 2025
Any EU “Friends” that the Granny Harmer might still have (and I doubt there are too many) have their own problems at the moment and even if (and that’s a big IF) they wanted to help him out, they can’t …
We’ll see this if (when) energy starts getting in really short supply – It will be Dog eats Dog.
January 8, 2025
We had to get rid of the last useless government and most sensible people knew that Labour would be just as bad or even worse.
Once we are through this ring of fire and got rid of student polit8ics, we will hopefully have – at last – a proper government.
A pity that the Left wing media did not acknowledge the comparison to Liz Truss (a hero to me). Another nail in the coffin of the BBC.
January 8, 2025
Reeves not only sounds like Major (spits her words out individually – like a computer) but she is in exactly the same position that Major engineered as Chancellor and reaped as PM. When interest rates hit 17% it was obvious that his position was unsustainable. I understand he had a panic attack and Lamont had to come out and tell us the Good News!
So cheer up – things are getting worse – they are actually unsustainable – Nrs 10 and 11 will collapse. I don’t think the rest of the Govt is capable of standing without those two crutches.
Here comes Humpty – in free fall.
January 8, 2025
It’s noticeable that Rachel from Complaints hasn’t been summoned to the IMF for a lecture (and effective dismissal) and the Bank of England hasn’t deliberately undermined Keir-Ching in order to get rid of a useless Chancellor and a PM they disapprove of.
January 8, 2025
+1
January 8, 2025
Mad dogs and English (wo)men go out in the midday sun.
January 8, 2025
Remember “We won’t take any lectures from you” Gordon Brown’s mantra (followed by inexperienced ,over confident Rachel Reeves).
Then the magic money tree disappeared.
“Sorry no money left” pathetic joke by MP Liam Byrne who smugly chairs a Select committee tearing strips of others for their lesser faults.
Lessons have been learned?
How to trash the golden goose that lays the golden eggs.
Gordon Brown thought he had so much good that he got rid of it.
Basic maths before economics is desperately in short supply.
January 8, 2025
The high risk Chancellor with no where to go
the cycle of more debt more taxes
January 9, 2025
When a so called conservative government fail to get it right, as you so often drew attention to, any expectations of Rachael from accounts are to say the leased misplaced.