After last year’s election PM Keir Starmer, Chancellor Rachel Reeves and Deputy PM Secretary Angela Rayner thought they were finally running the UK, but they’re no longer in charge of events.
So who is telling the UK what to do?
President Donald Trump and US tech billionaire Elon Musk are giving it a go, but it’s not them. It isn’t Nigel Farage either.
For years, Euro sceptics accused the EU of bossing us about, but it’s not them either.
Our real lords and masters like to keep their heads down, but now they’ve been forced to give us a public dressing down.
Rachel Reeves’ ears are still ringing, and will continue to ring until she’s fired.
So who is dictating UK economic and political policy?
The same people who’ve been running it for years. A shadowy group of international investors that go by the name of the bond market.
You didn’t vote them in and you certainly cannot vote them out. Bond market representatives do not sit in Parliament or write the laws that govern our country.
They don’t have a name, a face or an institutional body that sets out their policy or handles queries and complaints.
And we’re stuck with them, like it or not.
The bond market is made up of a global band of institutional investors who buy government debt such as UK gilts.
Governments rely on bond investors to borrow money, so have to keep them sweet.
If they turn against us, we’re doomed.
This was the lesson that former Tory PM Liz Truss learned in September 2022, when she announced £43billion of unfunded tax cuts.
His mini-Budget fiasco triggered a bond market strike, as investors lost confidence in her handling of government spending and debt.
Yields on 10-year gilts rocketed to 4.22% in a matter of hours, and the PM was gone. The UK did as it was told.
The bond market has that power. In 1998, US President Bill Clinton’s political adviser James Carville said it was more powerful than presidents and popes.
And now Reeves has handed it yet more power, with her Budget fiasco.
Reeves plans to borrow £297billion this year. That’s a mind-boggling sum, and the only place she can raise it is the bond market.
So she needs to win their trust.
Instead, she’s thrown it away by losing control of tax and spending, just like Truss did.
She’s not up to the job and the bond market knows it.
As a result, so-called “bond vigilantes” are demanding higher rates of interest to buy UK government bonds. Yields on 30-year gilts have hit the highest since 1998 at almost 4.9%.
That will cost taxpayers an extra £12billion a year in extra interest payments so far.
It’s not all Labour’s fault. The Tories piled up the debts during their 14 years in charge.
But Reeves is the last straw.
Thanks to her, the UK is now the bond vigilantes’ number one target. After the events of recent days, she’s merely a puppet Chancellor. The bond market is her master now. Until it cuts the strings.
