BlackRock have warned that the upcoming General Election may lead to bond market turmoil as pre-election tax cuts and spending pledges from both parties are expected. The asset manager warned of the risk of the return of bond vigilantes (investors who who sell bonds to protest inflationary policies) as parties attempt to win over voters. While Labour has been attacking the Tories over Truss “crashing the economy“, they might want to look in the mirror. Guido reminds his readers of Labour’s £28 billion a year black hole, which Starmer confirmed he would borrow in the second half of the next parliament…

Bim Afolami, the government’s City minister, told Bloomberg:

“The bond markets are clear: Labour cannot borrow to pay for their £28 billion-a-year unfunded spending commitment without risking a debt crisis”.

The Labour Party may have enjoyed the political benefits of the markets bucking Liz Truss out of her saddle. They should remember that those same bond market vigilantes trust socialists even less…