Chris Johns

The fundamental question is how much can a country safely borrow?

The dirty secret of fiscal arithmetic is that we don't really know the answer with any degree of precision.

But the feeling is beginning to grow with some long-term borrowing costs in the UK, the really long-term stuff.

They've never been as high since the last century, Jim.

And, you know, that's scary.

I'm not suggesting that we're in for a fiscal crisis, but we very nearly got one with Liz Truss recently.

and well we had a mini crisis with Liz Trust and there seems to be a mini one brewing.

We're not there yet and hopefully we won't get there and I'm not suggesting that we're going to get into a Greece situation for example where the UK government will be thought likely to default but the fiscal crisis could force the government to raise taxes again and cut spending because spending is still not well enough controlled.

We spend far too much on

in a very inefficient way.

And I know that remark courts all sorts of controversy, but we've got a benefits bill that's rapidly approaching levels that we can't afford, given the levels of taxation that we have.

Clearly, we could afford more benefits if we put taxes up, but I'm not sure what people are going to think about that.

So the fiscal sustainability is something out there on the horizon that people are beginning to question.

The markets are beginning to question with these ever higher interest rates.

And the reason why those interest rates went up again today is because whoever is likely to take over from Starmer is going to be a traditional lefty labor politician who's just going to see any problem as something that they are to throw money at.

And this could get really serious if when Starmer goes, Rachel Reeves also goes because people in the markets will say there's nothing but borrowing trouble ahead.

The UK is already borrowing too much.

It would be fine if the economy was growing.

But as I keep saying, we're now into our second decade of virtually no growth.

We're in a Japanese situation of lost decades, not just lost years.