Britain’s politicians need to worry less about the bond markets – and more about the Bank of England | Daniela Gabor
A new model of central banking would weaken the power of bond vigilantes – and help progressive politicians pay for transformative change
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Daniela Gabor is professor of economics and macrofinance at Soas, University of London
A spectre is haunting British politics: the bond markets.
Defending Keir Starmer after the disastrous local election results earlier this month, the chancellor, Rachel Reeves, warned that a leadership contest would trigger the wrath of those investors who lend the state money by buying and selling UK government bonds (also known as gilts). The prospect of Andy Burnham winning that contest prompted shriller warnings: the left-leaning contender, after all, had dared to suggest governments should stop “being in hock” to the bond markets.
Daniela Gabor is professor of economics at Soas, University of London