The bond market plays a crucial role in shaping government spending decisions – but how much power does it really have? With a Budget around the corner, are investors or Rachel Reeves setting the limits on fiscal policy?
In this episode, we unpack how the government borrows, why it’s so expensive right now, and what “fiscal credibility” really means. Joining Helen are Jack Meaning, Chief Economist at Barclays, and Ben Zaranko, IFS, to discuss the state of the bond market, the lessons from the Liz Truss era, and what investors will be watching for in the 2025 Budget.
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00:00 – Introduction
1:42 – What is a bond?
5:55 – What’s happened in the bond market recently?
9:04 – Changing role of DB pension schemes
11:55 – The Truss era
16:13 – Are we still paying the price today?
18:48 – Is the UK in hock to the bond market?
23:20 – What will investors be looking for in the Budget?
29:50 – The dynamics around the Budget
35:48 – Does political uncertainty affect the market?
38:15 – Conclusion
Truss cost me 36k over the 5 years of my mortgage the single hardest thing ive ever dealt with, so not overblown. Under reported if anything.
Most of the borrowing has been done to pay for the financial sectors greed and incompetence. The UK barely had any debt until Tony Blair deregulated the banks, left interest rates in the hands of Central bank and all those financial crises and scamdemics.
Isn’t the BOE effectively printing money if it buys government bonds (QE) but then doesn’t sell them (suspended QT)? We all expect central banks to monetise the debt in the end – hence, the currency debasement trade.
If the economists I choose to beileve – Richard Murphy, Stepahie Kelton, and Dr.Steve Keen are correct this podcast is a disgraceful attempt to convince the public that we need to kow tow to Markets. This is a simplistic discussion that relates government borrowing to our ability to invest in infrastructure. This is not the full story. It is impossible to understand how the bond market works with out explaining how quantitive easing and quantitive tightening works. But let's be honest a representative of Barclays was never going to tell us anything different. One thing is for certain is this neoliberal / neoclassical approach to economics would never have allowed us to survive WWI and WWII and rebuild the infrastructures of both the UK and Europe in the post WWII era.
How to transfer massive amounts of public money in to private hands. This is the rral scandal the establishment doesn't address. It's a con folks
When discussing 2022, it's amusing no one mentioned BOE's role in it all.
I Would Love to Know WHO PAYS for Institute for Fiscal Studies ?
There's someone who knows nothing about double entry accounting and how it affects monetary policy.
Bollocks it's not an IOU it's a secure form of investment
An expensive time to borrow? Only relative to the last 15 years. Look at a longer historical timerame.