This year the ten year government borrowing rate has always been higher than the brief spike top rate under Liz Truss. This is the result of a very bad budget killing growth and an April of the government putting up managed prices, taxes and inflation. Still Rachel Reeves talks of the disaster rate of 2022 without stating her rates are always higher. She says she has brought stability . She has brought no growth and rising inflation.
The turbulence brought by Trump’s tariffs and the US/ China tariff war sees UK bonds and the pound falling as well as US Treasuries and the dollar. This is not surprising. The budget and the Spring statement left little margin in the figures compared to target. Events of the last week hVe probably eliminated the margin in the numbers. Reeves is back to looking for spending cuts and fending off Labour demands to hike taxes more. With thousands of rich people heading for the exit her revenues will now be squeezed. With Miliband’s policies shutting down our car and steel industries and much else besides the government needs urgently to revisit its growth strategy.
April 10, 2025
You may as well sit Rachel Reeves at the Heathrow Landing Control panel and walk away. All flashing lights and buttons. She has no clue and the result is 100% guaranteed.
April 10, 2025
There’s no growth strategy, there’s Net Zero which is anti growth and going swimmingly to plan.
Thieves will blame anyone and anything for the lack of growth unwilling to admit she’s following the Agenda 30 WEF playbook.
Trump has somewhat disturbed the strategy so she will have to double down on her ruinous strategy.
Only the Bond Market will stop her in her tracks.
April 10, 2025
It’s a two tier bond market. As Sir John points out, it was just a lower, brief spike which toppled Liz Truss and our chance of recovery.
April 10, 2025
I hope my next landing at Heathrow is better than she will provide for the economy
April 10, 2025
I say again, imagine how much easier it would be now if the 2.7% a year trend economic growth rate from 1948 to 2008 had been allowed to continue to 2024 rather than being slashed to 1.1% a year for the sake of futile efforts to limit global warming. UK GDP, and therefore the UK tax base, 28% higher would have made a big difference. And I also say again that this problem of low growth started in 2008 not in 2016 and having very little to do with Brexit it should not be expected that unoicking Brexit will solve the problem.
April 10, 2025
Labour’s growth strategy is focused entirely on growth of the public sector and welfare.
There is never any mention of wealth creation.
April 10, 2025
Rachel Reeves’s stability is the stability of death. To her, growth means growth of the state.
April 10, 2025
In the USA Moody released a study revealing that in the USA the top 10% of earners accounted for 50% of consumer spending. It is believed the top 10% also account for over 80% of stock ownership. Their spending is sensitive to the stock market value of their investments. It seems the collapse of the US stock market caused the screeching, if temporary, u turn by Trump on his so called “reciprocal” tariffs.
Likewise the smartest thing Reeves can do is make a screeching, but permanent, u turn to reverse the tax measures that has driven thousands of the wealthy from these shores to more tax friendly havens shores. That way they will be more likely to spend and invest in the UK than elsewhere.
April 10, 2025
President Trump has a growth strategy. It is to cut the Federal Budget by USD 2tn and pass the proceeds onto American consumers in the form of DOGE dividends. In practice that might very well be tax cuts originally planned for next year brought forward to this year.
The exceptional Conservative government of the 1980’s founded this ethos by rolling back the state and reducing taxes accordingly. This led to strong growth and widespread opportunity for all.
The Chancellor therefore knows what she needs to do to generate economic growth and it is not her original intention for government spending induced growth.
Britain desperately needs to stop any wasteful government spending, maximise public sector efficiency and transmit those savings as tax cuts.
There is an array of possibilities to make this happen many suggested by Sir John already.
April 10, 2025
Glass half full, good for exports. Glass half empty, bad for holidays. Currencies move against each other, it is the way banks and dealers make a profit, and was always so.
April 10, 2025
The price of currencies reflects supply and demand. When there is a trade deficit it is financed by borrowing and other capital flows. These can take the form of inward investment into new ventures that can expand the economy or the sale or mortgaging of existing assets that see the interest, profits and dividends accrue to foreign owners instead of recirculating domestically, or they can be explicit borrowing through the sale of debt (gilts, mortgages and other loans) to foreign buyers. There can also be safe haven flows of hot money that regard the UK as a better place to bank.
When there is an imbalance between the flows they adjust via the exchange rate and via increased interest rates to sweeten returns to foreign financers. When government policy drives away capital flows by taxing non doms and the mobile rich and businesses and closing them down there will be a lot of pressure on exchange rates which will act to lower export earnings and drive up import costs, causing inflation.
April 10, 2025
When I heard Rachel from Accounts deliver the budget last autumn, despite not having her extensive experience as an economist (lol) or a degree in economics, I could see immediately that it was going to lead to stagflation.
I concluded that the Government (or to be more accurate, the pro-EU Establishment) was deliberately crashing the economy, in order to provide justification for the intended Brexit treachery and the plan to drag us back under the control of the EU without actually rejoining the corrupt Oligarchy.
The Stagflation Budget is doing what the Stagflation Budget was designed to do.
It remains to be seen whether Trump’s Tariff War will change the plan, but I doubt it. It is ideological; it’s not based on economics let alone what is in the interests of the British people.
April 10, 2025
Gold fully lived up to it’s reputation as a safe haven during the extreme market turbulence brought on by Trump’s mad tariffs scheme. Last night in Asia trade, the yellow metal recovered and hit yet another spot all-time high at $3147/oz
Trump blinked first and yesterday was forced to announce a 90-day pause in the tariffs. The reason? The world has lost confidence in US debt and started sharply selling off US Treasuries – and the $dollar. There was a nice bounce in the American equity markets last night after the announcement, after the worst sell-off since the 2008 financial crisis.
That one man has the power to throw the global economy into such turbulence is very disturbing. Last night Trump signed an executive order demanding that water pressure in American faucets be increased, because of his “beautiful hair”. Oh dear. He is never more than a few feet away from the American “nuclear football”
April 10, 2025
April 10, 2025
Apologies – above was submitted too soon.
April 10, 2025
One submission picking over the entrails of history and one on recent events. The key challenge of the day is what to do about UK steel production.
I suspect that the Chinese bought it with the ultimate intention of closing it down. The stupidity of selling it to them in the first place is down to politicians to answer.
Steel making in the UK suffers the insanity of nett zero and consequent very expensive electric power. Having to import coal can’t
help either. So resolve those problems as an absolute necessity.
There is nothing wrong with nationalisation, except in the way we do it in the UK. Other countries adopt it with success. Of necessity steel making will have to be nationalised. My solution would be to nationalise it, but then keep government, politicians, and quangoes out of sight. Put it in the hands of a professional management team, god forbid not consultants, drawn from an already large sucessfull engineering company. One that understands steel making, value analysis, and productivity. Combine that with an involved workforce, minimal cost power, and very light touch ownership and it might end up as a steel industry we are proud of.
April 10, 2025
Every Labour Government ruins the economy; this one is just doing it faster than usual. Rachel Reeves has been exposed for her lack of understanding of economics. Now she says we need a closer deal with the EU! Has there ever been a Chancellor so stupid? High office exposes the strengths and weaknesses of the individuals appointed. The Chancellor has no strengths, just weaknesses; the same applies to the PM. Add to that the appalling Net Zero zealot Ed Miliband, who also has not got a clue and the UK is on course for bankruptcy!
What does it say about our education system that they are so inadequate for the UK at a time when we need wise, inspired leaders in an increasingly dangerous world?
April 10, 2025
No! Every government for the last 59 years has ruined the economy.
Industries privatised – where’s the money gone?
Council houses sold – where’s the money gone?
Cottage hospitals sold off – where’s the money gone?
Now we borrow to build hospitals – PFI – who’s getting rich?
University education used to be free!
The rich have got richer.
Young people have no job security, no chance of buying a home.
Governments of the last 50 years have ruined this country while borrowing fortunes. They could not have been more useless.
April 10, 2025
Car park in Bridport – 1 hour up from £1 to £1.20 in last two days PLUS JustPark have now decided to charge a 10 pence transaction fee. So, a nifty 30% inflation there. Council tax up, gas and electricity up, car tyres up, coffee up, recently renewed buildings and content insurance went up £80 – a 30% increase.
Inflation is out of control.