Larry Elliott seems to have been maintained by The Guardian in a sort of "emeritus" economics correspondent role. He's about as good as some "emeritus" professors are, except they've usually been good first.
Absolute straw manning nonsense here.
https://www.theguardian.com/commentisfr ... y#comments
I haven't seen anybody claim that the UK will suffer "contagion" from France. Not one person. I've seen lots of people say that taxes need to go up in the UK for its own reasons.
As ever, fiscal choices are put in terms of standing up to "bond vigilantes", like there's some moral case being made. Once you take that language out, what are you left with? A practical question about how much you want borrowing to cost, and the effect of it.
Britain has its own currency and a central bank with the ability to set interest rates.
Raised interest rates, famously a painless economic win. Just like higher inflation. What interest rate to governments pay to lenders? Is it the one set by the Bank of England, or by "bond vigilantes"?
During the global financial crisis of 2008 and the Covid pandemic of 2020, the markets were only bailed out thanks to the willingness of governments to print money and run big budget deficits. There was no talk of the need for the bond market vigilantes to impose financial discipline back then.
It's almost like the world economy was collapsing and lots of lenders were looking to government bonds as a safe haven, Larry. Forget the "talk". What do the actual borrowing rates tell you?
It can argue that financial markets are often capricious and destructive. It can argue that uncaging finance has not produced the improvement in economic performance promised by the Thatcherites. It can argue that the whims of the markets should not be allowed to prevent the need for a generously funded industrial strategy. It can argue that by raising tariffs and taking a stake in the US chipmaker Intel, Donald Trump has made the unthinkable thinkable. It can make the case for targeted and transparent controls to prevent short-term capital movements blowing the economy off course.
Write that on top of your GCSE paper, see how many marks you get, as my old teacher used to say. Invest in Britain, we might stop you getting your money out! Not much of a pitch, is it?
isn't it, you know, easier to raise taxes, now or schedule them for a year's time to allow for the economy to build up some impetus?
The "warning" from France would seem to be- don't call an election and end up with a Parliament with so many Far Right and Far Left populist goons in it. Not something Reeves will likely do.
- By Youngian
- By kreuzberger