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30 year hits 5.7

The BBC now reporting on it

Long-term government borrowing costs in the UK reached their highest level since 1998 on Tuesday, adding to the pressure on the chancellor ahead of the Budget.

The interest rate on 30-year government bonds, known as the yield, jumped to 5.698%, its highest level for 27 years, as worries grew about the state of the government's finances.

There are rising expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year in order to meet her financial rules.

On the currency markets, the pound also fell more than 1% against the dollar on Tuesday morning.

Governments borrow money from investors by selling them bonds - which is a loan the government promises to pay back at the end of an agreed time.

The yield on 30-year UK government bonds - known as gilts - has been rising for some months, and this makes it more expensive for the government to borrow money due to higher interest payments.

The government's official forecaster, the Office for Budget Responsibility (OBR), takes borrowing costs into account when looking at whether the chancellor is meeting her self-imposed fiscal rules.

When she became chancellor, Reeves set out two rules for government borrowing - that day-to-day spending would be paid for with government revenue, which is mainly taxes, and that debt must be falling as a share of national income by the end of a five-year period.

Part of the reason Reeves is under pressure is that her financial buffer to stick to these rules is a relatively slim £10bn.

Susannah Streeter, head of money and markets, Hargreaves Lansdown, said: "The UK Chancellor is facing highly difficult choices in the upcoming Budget, and she's been dealt a warning by gilt investors.

"They are selling off UK government debt, clearly concerned that the government may be losing its grip on the public finances."

Has Rachel “tiny tears” Reeves thought about openly crying in public for half an hour? Again? That should inject some much needed confidence

I doubt she will survive as Chancellor beyond Christmas and certainly if the bond markets lose all confidence in her we are back at Truss crisis levels

Yes. She surely has to go. She should have gone ASAFP after the tiny tears breakdown blubfest. You simply can’t have your finance minister crying in public. Markets don’t like it. They lose confidence. Who can blame them?

Starmer is running out of options fast but that’s one lever he can pull. Sack the CotE and get anyone else in. There must be someone with a brain who doesn’t look like a lesbian worzel gummidge

It probably won’t save them and it’s probably too late. We are going to hit the fiscal iceberg. But drowning men and straws etc

How does sacking Reeves help anybody in the government?

The fundamental problem is that there are two doom loops going on.

One is that as borrowing costs tick up, the government finances get worse and worse because of our mountain of pre-existing debt. And as the government finances get worse, it drives the government's borrowing costs up.

The other is that with taxes at a historic high, increasing tax rates is providing less and less yield (laffer effect), and doing more and more economic harm. The more economic harm that is done, the less economic growth there is, and so the lower the future tax revenues.

The only real route to break these twin doom loops is to cut public spending by £lots. Reeves tried cutting public spending by £little, and it turned out that her party wouldn't wear it. Starmer could bin her, but then what? Her replacement has exactly the same problem - the only credible solution is to cut spending and endure the resultant squealing, but somehow they've got to get Labour MPs to vote for that, and they won't.

Neither will the other parties even though they know it is needed

I am not saying this will happen but if nobody breaks the logjam the IMF will

The IMF (non) intervention still hangs around the neck of the Labour Party since the Healey chancellorship almost half a century ago. I don't believe they will be going cap in hand to the IMF unless as a final, final, last resort, however much PB Tories are willing it on.

I am not willing it on at all, as it would be a dreadful situation, but you cannot argue with the financial observations today and evidence that the government is losing the market's confidence

Worst since 1998. Who was PM in 1998, a year into a new Government? How did they do in the next election? (I am not suggesting history will be repeated at the next election mind).

Bad news is easier to ride out when you have a poll lead of between 19% and 26% than when you’re in the doldrums and people are speculating about the future of you and your chancellor.

Graham Linehan has been nicked

To quote

It’s getting both silly and sinister. There’s a chilling effect on public discourse when there is only one permitted view on a topic as seems to be the case

I've seen the tweets in question. You can understand why an outside observer might start to question free speech in the UK.

Advocating violence, ah, but it was a joke so that makes it ok. You may be right that this is an absurd overreaction but is it remarkably different from what Lucy Connolly posted about asylum hotels?

Presumably it's for the 'punch them' bit. Looks a bit daft, but then he's also a living example of David Cameron's comment about Twitter, it seems.

The 'armed police arrest' thing is presumably because it was at Heathrow. Are there many unarmed police knocking around Heathrow?

"If a man is in an all women area punch them in the bollocks". I have no issue with that.

Careful now

It does raise the question of why all these men wanting to punch the trannies in the bollocks are in an all women area.

Which men? Linehan was suggesting in a comic way (punch in the bollocks due to the size differential, pace Peggie vs Upton) that women may respond to men being in the women's changing room.

So a man telling women what to do, then?

A comic writer making a comical point. Hardly the same. Plenty of men on here telling women what to think on the trans issue. The mansplaining is ace.

Talking about matters trans, the Sullivan Report is being discussed in the RSS Conference in about a hour. If anybody has any questions for the discussants, let me know by 3pm

Have we done Robert Jenrick's near miss for Contempt of Court?

An "appalling" social media post from the account of top Tory politician Robert Jenrick was feared to pose a threat to the fairness of the Lenny Scott murder trial. The ECHO can reveal how a post on X, formerly known as Twitter, was brought before the presiding high court judge by both the prosecution and defence due to fears over a possible contempt of court.

The post, made by the shadow justice secretary and shadow lord chancellor on July 1, around a week into the criminal proceedings, was called "appalling, outrageous and egregious" by senior defence counsel Caroline Goodwin KC. Ms Goodwin, who represented the gunman Elias Morgan during the trial, added the post "put [Mr Jenrick's] political ambitions first and the requirements of justice second".
...
Mr Jenrick's X post said: "Lenny exposed corruption and took on the gangster controlling a prison wing. He received threats to his life, but he was left unsupported. Four years later he was shot dead. That will enrage any decent person. We need radical change, now."

https://www.liverpoolecho.co.uk/news/liverpool-news/tory-robert-jenrick-slammed-appalling-32389007

Graham Linehan has been nicked

To quote

It’s getting both silly and sinister. There’s a chilling effect on public discourse when there is only one permitted view on a topic as seems to be the case

I've seen the tweets in question. You can understand why an outside observer might start to question free speech in the UK.

Advocating violence, ah, but it was a joke so that makes it ok. You may be right that this is an absurd overreaction but is it remarkably different from what Lucy Connolly posted about asylum hotels?

Presumably it's for the 'punch them' bit. Looks a bit daft, but then he's also a living example of David Cameron's comment about Twitter, it seems.

The 'armed police arrest' thing is presumably because it was at Heathrow. Are there many unarmed police knocking around Heathrow?

"If a man is in an all women area punch them in the bollocks". I have no issue with that.

Careful now

It does raise the question of why all these men wanting to punch the trannies in the bollocks are in an all women area.

Which men? Linehan was suggesting in a comic way (punch in the bollocks due to the size differential, pace Peggie vs Upton) that women may respond to men being in the women's changing room.

At the risk of inflaming you further, where does the differential size thing come into the tweet? I mean it would be pisspoor comedically, but the 'joke' doesn't even exist.

30 year hits 5.7

The BBC now reporting on it

Long-term government borrowing costs in the UK reached their highest level since 1998 on Tuesday, adding to the pressure on the chancellor ahead of the Budget.

The interest rate on 30-year government bonds, known as the yield, jumped to 5.698%, its highest level for 27 years, as worries grew about the state of the government's finances.

There are rising expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year in order to meet her financial rules.

On the currency markets, the pound also fell more than 1% against the dollar on Tuesday morning.

Governments borrow money from investors by selling them bonds - which is a loan the government promises to pay back at the end of an agreed time.

The yield on 30-year UK government bonds - known as gilts - has been rising for some months, and this makes it more expensive for the government to borrow money due to higher interest payments.

The government's official forecaster, the Office for Budget Responsibility (OBR), takes borrowing costs into account when looking at whether the chancellor is meeting her self-imposed fiscal rules.

When she became chancellor, Reeves set out two rules for government borrowing - that day-to-day spending would be paid for with government revenue, which is mainly taxes, and that debt must be falling as a share of national income by the end of a five-year period.

Part of the reason Reeves is under pressure is that her financial buffer to stick to these rules is a relatively slim £10bn.

Susannah Streeter, head of money and markets, Hargreaves Lansdown, said: "The UK Chancellor is facing highly difficult choices in the upcoming Budget, and she's been dealt a warning by gilt investors.

"They are selling off UK government debt, clearly concerned that the government may be losing its grip on the public finances."

Has Rachel “tiny tears” Reeves thought about openly crying in public for half an hour? Again? That should inject some much needed confidence

I doubt she will survive as Chancellor beyond Christmas and certainly if the bond markets lose all confidence in her we are back at Truss crisis levels

Yes. She surely has to go. She should have gone ASAFP after the tiny tears breakdown blubfest. You simply can’t have your finance minister crying in public. Markets don’t like it. They lose confidence. Who can blame them?

Starmer is running out of options fast but that’s one lever he can pull. Sack the CotE and get anyone else in. There must be someone with a brain who doesn’t look like a lesbian worzel gummidge

It probably won’t save them and it’s probably too late. We are going to hit the fiscal iceberg. But drowning men and straws etc

How does sacking Reeves help anybody in the government?

The fundamental problem is that there are two doom loops going on.

One is that as borrowing costs tick up, the government finances get worse and worse because of our mountain of pre-existing debt. And as the government finances get worse, it drives the government's borrowing costs up.

The other is that with taxes at a historic high, increasing tax rates is providing less and less yield (laffer effect), and doing more and more economic harm. The more economic harm that is done, the less economic growth there is, and so the lower the future tax revenues.

The only real route to break these twin doom loops is to cut public spending by £lots. Reeves tried cutting public spending by £little, and it turned out that her party wouldn't wear it. Starmer could bin her, but then what? Her replacement has exactly the same problem - the only credible solution is to cut spending and endure the resultant squealing, but somehow they've got to get Labour MPs to vote for that, and they won't.

Neither will the other parties even though they know it is needed

I am not saying this will happen but if nobody breaks the logjam the IMF will

The IMF (non) intervention albatross still hangs around the neck of the Labour Party since the Healey chancellorship almost half a century ago. I don't believe they will be going cap in hand to the IMF unless as a final, final, last resort, however much PB Tories are willing it on.

No Tories are "willing it on".

We all hope that Labour is not that disastrous for the nation to have to endure that outcome.

Again.

But there is a severe risk.

I can see why Labour are utterly fearful of it though.

TECHNICAL ECONOMICS POST

I'm no-one to give this government the benefit of any doubt. But I'm not entirely joining the current panic about long-term gilt yields for an important reason: we are currently engaged in the largest programme of quantitative tightening in our history. The Bank of England is essentialy dumping £75 billion of gilts, mostly but not entirely long-dated, on the bond market every year. This is a formidable headwind for that market, even if we had a government with a clue what it is doing (we don't).

Here is a fairly technical but not completely incomprehensible article on the Bank of England's website about it.

https://www.bankofengland.co.uk/speech/2025/june/catherine-l-mann-fireside-chat-at-the-federal-reserve-board-of-governors

For those that can't be bothered to read the whole article, it estimates, quoting other research, that QT of around £80 billion in a year, roughly our current rate, raises 10-year yields by 25 basis points. As we've been doing this for three years, and will do it for several more, and as the ECB is much earlier in its QT cycles, it is clear that the higher interest rates we see are not entirely due to the Reeves "moron premium". And also that the government could influence the Bank to postpone its QT programme if it got into desperate straits, certainly before calling in the IMF or whoever.

A further piece of evidence in favour of the theory that QT is a powerful influence on our current bond market tightening is the normalising of the yield curve over the last year or two. Two year gilt yields have actually fallen (the opposite of what you'd expect if the markets were expecting a short-term crisis) while 10 to 30-year gilt yields have risen. Since most QE happened at the longer end of the curve, this is exactly what you'd expect if QT rather than some imminent expectation of doom were a dominant factor in the bond markets.

TECHNICAL ECONOMICS POST

I'm no-one to give this government the benefit of any doubt. But I'm not entirely joining the current panic about long-term gilt yields for an important reason: we are currently engaged in the largest programme of quantitative tightening in our history. The Bank of England is essentialy dumping £75 billion of gilts, mostly but not entirely long-dated, on the bond market every year. This is a formidable headwind for that market, even if we had a government with a clue what it is doing (we don't).

Here is a fairly technical but not completely incomprehensible article on the Bank of England's website about it.

https://www.bankofengland.co.uk/speech/2025/june/catherine-l-mann-fireside-chat-at-the-federal-reserve-board-of-governors

For those that can't be bothered to read the whole article, it estimates, quoting other research, that QT of around £80 billion in a year, roughly our current rate, raises 10-year yields by 25 basis points. As we've been doing this for three years, and will do it for several more, and as the ECB is much earlier in its QT cycles, it is clear that the higher interest rates we see are not entirely due to the Reeves "moron premium". And also that the government could influence the Bank to postpone its QT programme if it got into desperate straits, certainly before calling in the IMF or whoever.

A further piece of evidence in favour of the theory that QT is a powerful influence on our current bond market tightening is the normalising of the yield curve over the last year or two. Two year gilt yields have actually fallen (the opposite of what you'd expect if the markets were expecting a short-term crisis) while 10 to 30-year gilt yields have risen. Since most QE happened at the longer end of the curve, this is exactly what you'd expect if QT rather than some imminent expectation of doom were a dominant factor in the bond markets.

I posted this a few days back.
The IPPR issued a paper strongly in favour of reducing the rate of QT.
https://www.ippr.org/articles/fixing-the-leak

No one else is pursuing the hair shirt policy to the same extent, and the banks could well afford the hit to the outsize profits they're making from the current policy.

It would also give the government about £20bn of headroom they don't now have.

If they were to use that for productive investment (far from a given) it would be a win/win/win in economic terms.

TECHNICAL ECONOMICS POST

I'm no-one to give this government the benefit of any doubt. But I'm not entirely joining the current panic about long-term gilt yields for an important reason: we are currently engaged in the largest programme of quantitative tightening in our history. The Bank of England is essentialy dumping £75 billion of gilts, mostly but not entirely long-dated, on the bond market every year. This is a formidable headwind for that market, even if we had a government with a clue what it is doing (we don't).

Here is a fairly technical but not completely incomprehensible article on the Bank of England's website about it.

https://www.bankofengland.co.uk/speech/2025/june/catherine-l-mann-fireside-chat-at-the-federal-reserve-board-of-governors

For those that can't be bothered to read the whole article, it estimates, quoting other research, that QT of around £80 billion in a year, roughly our current rate, raises 10-year yields by 25 basis points. As we've been doing this for three years, and will do it for several more, and as the ECB is much earlier in its QT cycles, it is clear that the higher interest rates we see are not entirely due to the Reeves "moron premium". And also that the government could influence the Bank to postpone its QT programme if it got into desperate straits, certainly before calling in the IMF or whoever.

A further piece of evidence in favour of the theory that QT is a powerful influence on our current bond market tightening is the normalising of the yield curve over the last year or two. Two year gilt yields have actually fallen (the opposite of what you'd expect if the markets were expecting a short-term crisis) while 10 to 30-year gilt yields have risen. Since most QE happened at the longer end of the curve, this is exactly what you'd expect if QT rather than some imminent expectation of doom were a dominant factor in the bond markets.

Yes, QT presumably has the opposite impact to the original QE.

Graham Linehan has been nicked

To quote

It’s getting both silly and sinister. There’s a chilling effect on public discourse when there is only one permitted view on a topic as seems to be the case

I've seen the tweets in question. You can understand why an outside observer might start to question free speech in the UK.

Advocating violence, ah, but it was a joke so that makes it ok. You may be right that this is an absurd overreaction but is it remarkably different from what Lucy Connolly posted about asylum hotels?

Presumably it's for the 'punch them' bit. Looks a bit daft, but then he's also a living example of David Cameron's comment about Twitter, it seems.

The 'armed police arrest' thing is presumably because it was at Heathrow. Are there many unarmed police knocking around Heathrow?

"If a man is in an all women area punch them in the bollocks". I have no issue with that.

Careful now

It does raise the question of why all these men wanting to punch the trannies in the bollocks are in an all women area.

Which men? Linehan was suggesting in a comic way (punch in the bollocks due to the size differential, pace Peggie vs Upton) that women may respond to men being in the women's changing room.

At the risk of inflaming you further, where does the differential size thing come into the tweet? I mean it would be pisspoor comedically, but the 'joke' doesn't even exist.

The point being that the woman cant punch in the face because the man is so much taller.

I would never defend it as a joke. Its not that funny.

But the entire post was this "If a trans-identified male is in a female-only space, he is committing a violent, abusive act. Make a scene, call the cops and if all else fails punch him in the balls."

Now you may disagree with this, but does this really merit five armed police arresting him at an airport off a flight? Really?

The point being he has balls. Which shouldn't be there.

What about post op?
Pretty sure our Graham is failry draconian on the issue, though him encouraging people to punch a set of non existent balls would serve as a fitting metaphor for his life in general.

And does he deserve or need to be arrested in such a manner? You seem unwilling to answer that question.

Yeah, apart from

James B
@piercepenniless
Graham Linehan is an unpleasant character whose pathological loathing of trans people has destroyed his own life. His online presence is a sordid gutter of monomania. Detaining him at the border for this is stupid, illiberal, counterproductive & authoritarian.

Five armed police? Why not just one or two? FFS. Hate the man - that's your right. Disagree with his views - that's your right. But agree that he deserves arresting in this way for a trivial post? Get a grip.

Fucking hell, have you suffered a brain injury?

What part of 'detaining him at the border for this is stupid, illiberal, counterproductive & authoritarian' don't you understand?