Gilts have been sliding down since Reeves delivered the budget as the bond market vigilantes read the small print and found they did not like it. That means the cost of the government borrowing (a mere £300 billion this year) has risen and this could have a knock on effect on mortgages rates. This is the result of what Reeves calls a balanced approach.
Incidentally, the benchmark ten year gilt rate this afternoon* according to City brokers Tullett Prebon was being offered at 4.47% yield, a full percentage point higher than the Truss spike which peaked at 3.47% the day after Kwasi’s budget, which was memorably reported at the time by the FT, BBC and establishment commentators as “crashing the economy”. Reeves herself said at the time that it was “disastrous” and “No other government is sabotaging their own country’s economic credibility like this Tory government. Borrowing costs up. Growth down.” Which is precisely what the OBR predicts will now follow her budget.
*A previous version of this article this morning misquoted the gilt yield from 2022.
This morning sees the start of the Investment Summit hosted by Rachel Reeves and she has put out the line to The Times that “investments are a vote of confidence in the UK and the stability that this government has brought back to the economy.” She claims “Britain is open for business.” Unfortunately the Treasury also let it be known to the Guardian that officials are considering proposals to double taxes levied on the gaming sector, as Rachel Reeves “aims to pull every lever possible to raise funds in her upcoming budget.” Seeing as her manifesto revenue-raising proposals have been exposed as a fantasy…
UK gambling stocks slumped this morning following the report that Rachel Reeves is weighing proposals to increase taxes on the industry by as much as £3 billion. Whoops…
Jefferies investment bank analyst James Wheatcroft called the proposals “unrealistic” adding “the proposals apparently being considered would all but wipe out bookmaker profitability in the UK, per our estimates”. Shares in Ladbrokes-owner Entain Plc dropped 15%, casinos operator Rank Group Plc fell nearly 7%. Evoke Plc, owner of the William Hill betting brand, slid 16% and New York listed Flutter Entertainment tumbled 8.8% on the back of the tax hike report. Hardly the pro-business news that investors at the summit want to hear…
The British gaming industry is a global player, with the major groups employing software engineers and operations being major employers in Stoke, Manchester, Leeds, and Sunderland. Taxes on business are taxes on jobs…
Lucy Powell on LBC, asked by Tom Swarbrick for her reaction to Labour MP Samantha Niblett’s call for a ‘summer of sex’ debate in Parliament: “I personally don’t own any sex toys, but each to their own… I’m not really sure that’s the right place for it, no.”
