Those who admire David Smith's balanced and sensible assessments of the British economy are spoilt for choice in the Sunday Times this morning as he has two articles.
One points to the increasing cost of financing government debt as coupons on gilt edged stock increase. Part of this is the result of the uncertainty created by Donald Trump's policies with interest on US Treasuries also rising.
However, UK gilt edged interest rates are also higher than in comparable economies. Like the US we are running a twin deficit: on our spending and on our balance of payments.
More generally, Smith draws attention to the political reluctance to rein in public spending. (My words) UK taxpayers continue to think that they can have American levels of taxes and Nordic standards of public services. As for soaking the rich, the top one per cent already pay nearly one third of income tax receipts.
If I had been Chancellor, I would not have scrapped the winter fuel allowance, although I would have made it taxable for the one million or so pensioners who (like me) are higher rate taxpayers. I would also have ended the emergency 5p Ukraine war cut in fuel duty introduced by Rishi Sunak.
Reeves is now hemmed in by Labour's election pledge not to increase the three main sources of tax revenue while welfare benefits continue to increase. She is also hamstrung by her fiscal rules: breaking them could provoke a market panic.
I dislike the 'Rachel from accounts' misogyny from the right-wing press, but she has just two more chances to get it right: the impending spending review and the autumn budget.
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