Sky's economic editor says the way the financial industry is reacting to efforts by the Bank of England's attempts to stabilise the bond markets is unnerving, and the UK is increasingly turning into an economic laboratory for the epoch we live in
But to understand what a tricky position it's in, you need to zoom out even further. For while it's tempting to blame everything on the government and its mini-budget, it's fairer to see this as the straw that broke the market's back. For there are three intersecting issues at play here.The first is that we are in the midst of a seismic economic moment.
A few years ago, when the US Federal Reserve thought out loud about reversing quantitative easing - as the bond-buying programme is called - it triggered such a panic in bond markets that it immediately thought twice about it. Markets were, as one adviser to the Truss team warned them, febrile. It is hard to think of many worse moments for a new, untried and untrusted government to introduce uncosted fiscal plans. Yet that is whatIt wasn't about the sums but a dramatic loss of credibility for the government.
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