If the govt is serious about increasing defence spending to the new agreed NATO average, and the time scales to achieve such have been agreed, why haven’t the bond markets gone delirious*, given that no compensatory economies have been proposed? We’re talking about tens (or hundreds?) of billions on just one expenditure category..
* though I gather they ticked up a bit for a short while when the Burnham issue was alive.
If the govt is serious about increasing defence spending to the new agreed NATO average, and the time scales to achieve such have been agreed, why haven’t the bond markets gone delirious*, given that no compensatory economies have been proposed? We’re talking about tens (or hundreds?) of billions on just one expenditure category..
* though I gather they ticked up a bit for a short while when the Burnham issue was alive.
I think the difference with post-mini-Budget gilts crisis is:
The markets ultimately expect tax rises
UK spending more on defence would be in step with other economies (like Covid spending)
Spending on defence should help boost growth/jobs/supply chains
We’re not talking anywhere near hundreds of billions of pounds of additional spending!
Gilts probably will rise, but for lots of reasons I couldn’t come close to understanding how to unpack