Labour Budget Faces Market Scrutiny

Following Labour's first budget under Chancellor Rachel Reeves, Treasury minister Darren Jones emphasized that the current economic situation is markedly different from the turmoil experienced under former Prime Minister Liz Truss, which left many with 'PTSD'. The budget introduced approximately £32 billion in annual borrowing, leading to increased government bond yields and a decline in the pound's value, despite the International Monetary Fund welcoming the new fiscal plans. Jones defended the budget's measures, highlighting that markets typically respond to such announcements and comparing Labour's approach to Truss's controversial mini-Budget, which involved unfunded tax cuts and disregard for fiscal oversight. He acknowledged that the planned rise in national insurance contributions for employers would ultimately affect working people, although Labour's manifesto had promised not to raise income tax or employee NIC rates. Critics, including the Institute for Fiscal Studies, warned about the sustainability of the budget's spending increases and the potential for further tax hikes if projected economic growth does not materialize.