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 Ā 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 Ā 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 Ā 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 Rachelās choices were very limited, or maybe she is just incompetent.
January 9, 2025
They were very limited. She could do only one of two things. The right thing or the wrong thing. She chose the wrong thing.
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 governmentās 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 9, 2025
You canāt get blood out of a stone. Because of the crisis the State will be cut to the bone. We canāt afford the Asylum Scam or the Net Zero Scam. I see the Govt has ditched the banning of gas boilers in 2035.
Reality does not compromise.
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 9, 2025
Trust her to aim 180 degrees out!
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 Sunakās job for them. They need to force the people of the UK to seek salvation on shabby terms with the unelected unaccountable EU Bosses ā the very people they and the previous crews where enamored with. All of them knew that wouldnāt 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 9, 2025
I posted the same analysis a few days ago.
The economic destruction is being done deliberately to support the Establishment’s “Brexit has ruined the economy, we must rejoin the EU” narrative.
If the economy was going gangbusters or even ticking over nicely, their justification for betraying the majority who voted to leave the EU would be weaker. It’s noticeable that the IMF hasn’t summoned Rachel from Complaints for a lecture/sacking and the BofE has not pulled the rug from under Keir-Ching.
The economic destruction is deliberate.
January 9, 2025
Reeves is shocked. As Starkey says, she thought copying Yellan would produce the US growth result. But Yellan needed to throw billions on the state fire to get the growth, and here Johnson had already maxed out every credit card available.
So without the pumping of billions, preferably trillions into the State Sector which eventually dribbles into the capitalist sector – no growth. The reverse.
Poor Rachel. She was going to show JR how stilettos make all the difference to Nr. 11.
January 9, 2025
Where are all the lettuce jibes though?
The absolute burn of the MSM?
Ā£ at a 14 month low as bond sell-off continued – nothing to see here, no need to sweat.
Its rumoured she’s coming for pensions, so more prosperous people will stop saving in pensions. At the same time, it’s said she wants to reduce the 45% tax band to Ā£100k and retain the removal of that person’s tax-free allowance, causing a tax rate of 67%, 76% if you are an English grad. doing well.
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 9, 2025
Only because the Opposition is not doing its job. We have the tools. Just nobody can operate them. Need better manpower.
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 Ā£1309 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 9, 2025
This one was crashed before they took the wheel. Now they donāt know what to do. Their traditional role has been usurped. Thatās 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 donāt 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.
January 9, 2025
Sir John
āNow the Chancellor is in a bindā – are you so sure? What the Chancellor does is a collective responsibility agreement with advice from the Treasury that is then sanctioned by the PM.
The PM is the former Editor of the Socialist Alternatives, a Trotskyist magazine, then a Barrister and former Director of Public Prosecutions and Head of the Crown Prosecution Service. As such he knows how not to āplay your handā. Then kept quiet on all his intentions and winning the election by stealth as the other crowd were so inept.
Then consider Socialism is about creating a society in your own personal image, that is done by destroying/eliminating the existing structures. The rebuilding then happens with all dissenters excluded.
So to suggest this Government may be a bit thick, is the same as suggesting top Barristers are not well educated and trained, trained in the art of manipulation.
You could dismiss my thoughts as a conspiracy theory, but when you relate how fast, how contrived and how idealogical the zealots that have had power foisted on them have managed to corrupt all the UK’s systems and structures in such a short space of time.
It is like suggesting there was a Ā£20billion Black-Hole and the Treasury was neglect in its duties big time by not informing all incomers before hand. No Treasury staff sacked and they are still advising – so everything is still ‘honky-dory’ there then.
Reply I do not accuse PM/ Chancellor of being āthickā. Neither prepared for office or applied their minds to change and reform. They took official advice and look where it landed them
January 9, 2025
I always thought that the removal of Liz Truss was confected by Sunak’s cronies. Under any other circumstances she would have had time to sort things out regardless of initial mishandling of optics.
She could still have been PM if the Parliamentary Conservative Party had not engineered the overthrow of the vote that appointed Liz.
Now look at the mess our country is in!
January 9, 2025
That was certainly clear at the time. The Tories do not like party members telling them that the Conservatives should not simply seek a quiet life in kowtowing to the WEF, the UN and the ECJ.