David Vance SubstackRead More
It is commonly understood that all Labour Governments end in financial disaster but this one seems to have reached that stage in around a year!
You may have seen that UK gilt yields have just surged driven by high government borrowing, persistent inflation concerns, and a lack of confidence in Labour’s economic policies. Rachel from Accounts does not inspire confidence with the money men.
The 10-year gilt yield has reached 4.81% the highest since 2008. The 30-year yield hit 5.69%, marking a 27-year high and echoing 1998 levels.
This is financial Armageddon if things do not improve.
Even shorter-end yields like the 2-year rose to 4.01%!
Analysts at Goldman Sachs warn of risks from currency weakness or sticky inflation adding £10bn+ annually to debt interest.
The pound has weakened sharply against the dollar, dropping 1.50% to 1.33—the lowest since early April and on track for its worst day in months.
You may have seen that the Budget has now been delayed to late November, just in time for Christmas. This disguises all kinds of internal panic within Labour.
This “collapse” narrative stems from fiscal worries (e.g., Reeves’ budget tax hikes and borrowing), stagnant growth (zero Q3 GDP), and a deteriorating labour market, and this is amplifying gilt turmoil.
Liz Truss’s budget caused the gilts to raise from 3.03% to 4.42% in just over a month.
They are now way above this level and rising.
Our economy is in peril.
