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.
Robert Jenrick on the Today programme:
“Can you now give a guarantee to your listeners this morning that no BBC presenter in the future will be exposed as a paedophile, as a number have been in the recent past? No, of course you can’t…”