There’s something a little strange about why the market turned against Britain.
As economics and data editor Ed Conway explained on the Daily’s podcast, confidence appears to have been shaken “despite the lack of news that pushed us there.”
“That suggests it’s the atmosphere,” says Ed.
“The atmosphere turned against Britain.”
From Brexit to the budget, everything is contributing
Ed points out that the UK is not a huge outlier, as government borrowing costs are also on the rise in Europe and the US.
Global factors are impacting everything, including the impending inauguration of President Trump and its impact on trade.
So why the UK’s ‘atmosphere’ is particularly problematic at the moment is ‘difficult to unravel’.
“It’s like Brexit to some extent,” Ed says, but the 2022 mini-Budget also casts a long shadow.
But this was also Labour’s October budget, which was “useless”.
“People are nervous about Britain”
Even in the run-up to the big day, there was “word going around about how bad the economy is and this huge black hole” and the UK’s economic outlook “made people feel a little gloomy”.
“They’ve gone too far,” Ed said of Labor, which has failed to help restore Britain’s economic confidence after the damage it suffered under Liz Truss.
For a variety of reasons (2022 to fund tax cuts, 2024 for public investment) the UK government wants to borrow more money, but investors are not completely convinced. .
“As a nation, it takes a long time to build trust,” Ed says, but so far trust has not been rebuilt.
“People are still nervous when they look at Britain.”
Listen to the full episode below.
