UK’s long-term borrowing costs at highest level since 1998, wiping out chancellor’s fiscal headroom + raising prospect of more tax rises this year to stay within fiscal rules.
Investors sold UK government bonds today, driving yields on 30-year gilts by 0.08 percentage points to 5.25%, above level hit by Liz Truss mini-budget in 2022 + highest in 27 years.
Borrowing costs on more commonly issued 10-year gilts climbed to a 14-month high of 4.68%.
Tonight we’re talking about the economy.
Today sterling fell to its lowest level against the dollar since November 2023 – and UK borrowing costs hit levels not seen since 1998 earlier this week.
And this is really bad news, because it means the Treasury has less money to play with.
Running the economy is actually nothing like running a household Budget.
It’s not as simple as saying – right we’ve got X amount coming in through tax, which means we can spend X amount on public services.
Because the totals in the In and Out columns keep changing because of things you can never fully control.
Growth.. the cost of borrowing…the value of the pound… government bond markets.
Small changes to any of these can leave you with an awful lot more money to play with… or an awful lot less.
And that’s what Rachel Reeves has found.
It’s particularly difficult because she hasn’t left herself much headroom – there’s a razor thing margin against the main fiscal rule.
She came into office promising to be the Iron Chancellor – sticking to her fiscal rules come what may.
It sounds strong and reassuring… but it’s also inflexible.
She’s facing a worsening economic picture – but says she’s sticking to the plan. That’s a bit like continuing to drive down the same road even when half the tarmac’s been ripped up. Things are going to get bumpy.
The independent Office for Budget Responsibility is preparing a new economic forecast in March – which the Chancellor will respond to – and potentially make some adjustments to her plans.
If Rachel Reeves wants to stick to the rules – she needs more tax rises – or spending cuts.
If you thought November’s Budget was painful – it may be that you aint seen nothing yet.
Tea leaves and Book leaves: Cat Society By Ray Sadri https://t.co/Jxba7kbeuX Thank you Ray Sadri for letting me review your book. Out now to buy. Intriguing read.
Alas, it's not #FelineFriday (which would have made today a purr-fect day), but it is #InternationalCatDay.
Here are some of my favourite books/authors who have written about mousers and moggies. 😺📚
Dear @StarbucksUK I was surprised to be told by your barista in Euston this morning that you don’t do iced flat whites…! Surely you’re missing a trick here, they’d fly off the shelves!
@Starbucks#icedflatwhite
🐈⬛‼️ Cat Society book signing tomorrow at Waterstones Leadenhall‼️🐈⬛
Pop into @WaterstonesEC3 to pick up a signed copy of Cat Society.
And taste some free artisan @RedberCoffee.
20% of profits will go to the amazing @Battersea_ 🐶🐱
Thursday 18th
12.30-2.30pm
@LeadenhallMkt
The UK economy has made a stronger start to the year than advanced economies around the globe.
The latest round of purchasing managers’ index (PMI) surveys showed that the UK outperformed other developed economies, including the US.
https://t.co/jteUiuYvix
Introducing Mads. Mads allows the author to live with her, in her house in Guildford. The Norwegian Forest Cat has overseen the writing of #CatSociety, and even makes a cameo appearance in it. Here she is, in solidarity with the homeless cats living by the bins.
#cats#books
There is one important legal difference between Dogs and Cats...
Cats are by law free spirits, dogs aren't. You're liable for your dog's behaviour if it causes damage or injury to other people or property. So always check pet insurance has 3rd-party cover (if not as a min get it standalone from @DogsTrust). You're not usually liable for a cats behaviour.
Feel free to share.
A bit later than usual, @TalkTV’s Rescue Animal of the Week is Mads, nominated by @CatSocietyUK, who says: “Mads is a gorgeous, sandy brown Norwegian Forest Cat who I love, adopted 8 years ago from a shelter in Hastings. She is pure class and intelligent and very streetwise.”