UK governments raise taxes to post-war high under bond market pressure
Updated
Updated · The Guardian · May 1
UK governments raise taxes to post-war high under bond market pressure
9 articles · Updated · The Guardian · May 1
UK gilt yields have risen above 5%, their highest since 2008 and above every other G7 country, as investors price in inflation from the Iran war and political uncertainty.
The pressure has left Keir Starmer's government with little room to cushion a renewed cost-of-living squeeze, even as mortgages and energy-related inflation rise and growth is expected to weaken.
The article says both Labour and Conservative governments have bowed to markets since the 2022 Truss turmoil, while fragmented politics reflect wider frustration over weak growth, ageing costs, defence and decarbonisation.
With UK politics splintering and markets punishing borrowing, can any party realistically solve the cost of living crisis without risking financial turmoil?
As oil prices soar from the Iran conflict and markets demand a 'moron premium,' is the UK's economic model fundamentally unsustainable?
Could the government's pivot toward the EU and new regulatory powers backfire, increasing compliance costs and undermining UK business competitiveness?