The Rest Is Money 278. Can any Starmer rival rescue the economy?
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May 12, 2026 They debate whether Labour can deliver real growth amid political turmoil and rising borrowing costs. They unpack how bond markets and the pound react to instability. They weigh policies like shifting tax from wages to assets, equalising capital gains and income tax, and the pros and cons of nationalising steel. They explore leadership choices and what would convince markets of fiscal credibility.
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Instability Is Driving Up Borrowing Costs
- Political instability raises the UK's borrowing costs because markets doubt government strength and consistency.
- Robert Peston cites three PMs in weeks (2022) and seven since 2015 as evidence that instability drives higher long-term bond yields.
Markets Reflect Economic and Political Turmoil
- The pound fall and highest 30-year borrowing rates since 1998 show markets reacting to UK turmoil.
- Steph McGovern links this to geopolitics, cost of living, rising taxes, strained public services and eroding living standards.
Property Tax Targets Immobile Wealth
- A pro-growth Labour faction wants to incentivise operational businesses by taxing immobile assets like land.
- Peston notes land can't move, so property taxation is administratively feasible and targets concentrated unearned gains.