![\"Reeves-currency-crisis\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/03\/Reeves-currency-crisis-6814413.jpg\" "\\"Reeves-currency-crisis\\"")
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If you thought Rachel Reeves’s first two Budgets were bad, just wait for the next one one (Image: Getty)<\/p>\n
For months, I’ve been watching UK gilt yields like a hawk. Gilts are the bonds Britain issues to fund its spending. Yields show how much interest we pay to persuade bond investors to buy them. Bond investors no longer trust us. They think Chancellor Rachel Reeves has lost control of the nation\u2019s finances. The result? Gilt yields have shot up. They’re now at the highest level since 2008. That was the year of the global financial crisis. We\u2019re staring at a nightmare on a similar scale<\/a>.<\/p>\n Ten-year gilt yields have jumped from 4.25% at the start of March to 4.95% today. For gilts, that\u2019s a massive move. It will cost us billions in extra interest. Incredibly, yields are now higher than during the Liz Truss crisis in autumn 2022, when her mini-Budget sent markets into meltdown. Under Truss, 10-year gilt yields peaked at 4.42%, comfortably below today\u2019s level. The pound crashed, and Truss was gone within 49 days<\/a>. The Tories<\/a> never recovered. We\u2019re back there again. Already.<\/p>\n Reeves constantly claims she’s \u201cfixed the foundations\u201d of the UK economy. That’s another whopper. Growth has stalled, businesses are collapsing, jobs are being destroyed and the tax burden is at a record high. She\u2019s blown through her fiscal headroom twice, and looks set to do so again. Yet she still borrows like a drunken sailor on shore leave.<\/p>\n Read more:<\/strong> ‘UK in brutal reality check – Reeves, Rayner and Miliband to be blown away’ <\/a><\/p>\n Read more:<\/strong> ‘Rachel Reeves faces biggest crisis in 20 years – dragging us into the storm’ <\/a><\/p>\n In February, markets expected Reeves to borrow \u00a38.8billion. Instead, she racked up another \u00a314.3billion of debt. She’s nowhere near balancing the books, despite all the extra tax revenue she’s squeezed out of households and businesses.<\/p>\n Our monthly interest bill was \u00a35.5billion in February last year. This year, we paid \u00a313billion. In a single month. These figures predate war in Iran. Reeves can’t blame that.<\/p>\n Today, Gary Howes of PoundSterlingLive warned what’s coming our way in this year\u2019s autumn Budget. \u201cMore taxes are likely, and unfortunately for Reeves, avoiding spending cuts won\u2019t be an option this time around.\u201d<\/p>\n In her first two Budgets, Reeves has failed to cut spending, while raising taxes by almost \u00a370billion. No prizes for guessing which lever she\u2019ll pull again. Especially with Keir Starmer<\/a> under pressure from left-wing leadership rivals like Angela Rayner<\/a> and Andy Burnham, and Zack Polanski’s nutty Green Party<\/a>. But higher taxes will only destroy growth further.<\/p>\n<\/p>\n Reeves will point the finger at the Conservatives. And it’s true, they ran up a huge share of the debt (as did Labour’s Gordon Brown). But Labour opposed almost every attempt to control spending, attacking \u201causterity\u201d at every turn. Plus the Tories had a pandemic on their plate.<\/p>\n For years, Britain has lived beyond its means. We\u2019re still doing it now. And the bond markets can see it.<\/p>\n Ministers will also blame the Iran conflict. That\u2019s clearly accelerating events. But it hasn\u2019t created the underlying problem<\/a>. It\u2019s just exposed it. The UK now looks more vulnerable than its peers. Gilt yields are way above other major Western economies. Howes says the market is demanding a premium of the UK because \u201cit thinks it is the most vulnerable country to an emerging inflationary spike\u201d.<\/p>\n