Subscribe to In The City on Apple podcasts
Subscribe to In The City on Spotify
It’s been a rough week for UK assets. The pound fell to its lowest level in a year, gilt yields surged and investors are losing confidence in the government’s ability to control the nation’s deficit and high borrowing costs. Why are things spiraling now? Senior reporter Phil Aldrick joins this week’s In the City to explain.
“Investors seem to be making a judgement that [Chancellor Rachel] Reeves’ budget isn’t going to deliver what is necessary both to put the debt on a sustainable footing and to bring inflation down,” explains Aldrick. “There’s a nervousness about outlook.”
So is the economic plan she pitched six months ago—one aimed at plugging a massive budget void left behind by Rishi Sunak’s Tory government—on the brink? Possibly. Is it fair? Maybe not. “It seems a little unfair to put the UK right in the crosshairs of all this given we have a stable government,” Aldrick points out. “By comparison, you might say France looks like a bit of a basket case. And yet the UK is the one that’s really getting it in the neck.”