As Labour moves to implement its ‘growth’ agenda there will be one overarching thought guiding Rachel Reeves. As a former Bank of England economist, she recognises more than most that the formidable power of the bond market vigilantes – investors looking to bully errant governments for their own gain – has to be her lodestar.
Indeed, if Liz Truss and her Chancellor Kwasi Kwarteng had recognised this two years ago, it is entirely possible that Keir Starmer and Reeves might still be on the opposition benches.
Market-driven economic catastrophes are rarely forgiven by the electorate, especially if they sharply raise the cost of consumer borrowing and mortgages.
Reeves’ determination to hold the line on more public borrowing and ballooning debt and the mantra that all manifesto pledges have to be ‘funded and costed’ is no accident.
This is the stark financial lesson that France and the US should bear in mind amid their current election…
