I’d rather be optimistic, but here are the five main ways in which Rachel Reeves’ first #Budget is likely to unravel… 🧵

1⃣ the adverse reaction in bond markets, pushing up borrowing costs (we're already seeing signs of this, though talk of 'meltdown' is premature)...

2⃣ the adverse impact on household and business sentiment - aka 'animal spirits' - even before the Budget measures take effect

Consumer confidence was already wobbling in anticipation of a tight Budget, but the tax increases were larger and broader than most had expected...

3⃣ the wider loss of trust in government

IMHO, the tax increases in the Budget clearly breached the promises made during the election campaign and in Labour's manifesto.

The furore over the taxation of family farms could just be the tip of the iceberg...

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Julian Jessop

@julianHjessop

Oct 31

Five quick points on the adverse market reaction to Rachel Reeves' first #Budget... 🧵

1⃣ it's premature to talk about a 'meltdown', but today's jump in the cost of UK government borrowing is worrying (especially when yields in other advanced economies are flat or down slightly)

2⃣ 2-year yields have risen the most, suggesting that the jump is mainly driven by expectations that the short-term boost to growth and #inflation from the Budget (according to the OBR) will prompt the Bank of England to keep official rates higher for longer...

3⃣ however, worries about the extra bond issuance are clearly a factor too

The fact that #sterling has also fallen confirms that investor confidence is now more fragile, and that markets think higher rates and a cheaper currency will both be needed to attract foreign buyers...

Read 5 tweets

Julian Jessop

@julianHjessop

Jul 20

Over the last few days I've read some terrible takes on the 4-5 year jail sentences handed out to five #JustStopOil protestors (aka 'the #WholeTruthFive').

Here's a short 🧵 on why the sentences were justified and where the critics have gone wrong...

First, the facts.

It seems obvious that many of the people questioning the sentences haven't read the judge's explanation 👇

TL;DR the activists were convicted of conspiracy to cause a public nuisance which resulted in major disruption on the M25...

judiciary.uk/wp-content/upl…

The jury that convicted the #WholeTruth5 heard ample evidence of the significant harms done to members of the public (just some examples below), and of course it could have been even worse (indeed, this was the stated aim of the conspirators)...

Read 12 tweets

Julian Jessop

@julianHjessop

Jun 23

By popular demand, here’s a quick thread explaining the OBR’s assumption that #Brexit will reduce UK GDP by 4% over the longer term - and why it shouldn’t be treated as gospel.

First, let’s be clear what the figure actually means… 🧵

The OBR has assumed that the additional frictions to UK-EU trade after #Brexit will damage UK #productivity.

As a result, the *level* of GDP (strictly, GDP per head) will be 4% lower than it would otherwise have been in every year over the longer term...

Note...

i) this does not mean that annual *growth* would be 4% lower every year (that should be obvious!)

ii) this is only about trade, not other factors like immigration or domestic regulations

iii) the 4% is a guess at the long-term impact, not what has already happened

Read 14 tweets

Julian Jessop

@julianHjessop

Apr 16

I was going to ignore this obviously misleading post, but it is now being widely retweeted by the the usual suspects.

It is also a super example of #FBPE #Brexit 'confirmation bias'... 🙄 🧵 (1/7)

#badbrexittakes #tourism

Note first that the '23%' figure is unsourced ⚠️

It might be a misreading of data from the Association of Leading Visitor Attractions (ALVA), which reported that total visitor numbers to their sites were still 23% lower in 2022 than in 2019... (2/7)

bbc.co.uk/news/uk-649760…

But this is, of course, about #Covid, not #Brexit.

The ALVA itself attributed the shortfall "mainly to the absence of international visitors, notably from China and the Far East".

Global air travel and tourism was also still depressed in 2022... (3/7)alva.org.uk/details.cfm?p=…

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