Andy Haldane warns UK faces risk of 'Liz Truss plus' bond sell-off
Former Bank of England chief economist Andy Haldane says the UK risks a 'Liz Truss plus' bond sell-off unless the government shows it can curb public spending.
The Full Story
A plain summary built from the channels that reported this story.
Andy Haldane, the former chief economist at the Bank of England and now president of the British Chamber of Commerce, has warned that the UK faces the risk of a government bond sell-off on the scale of the Liz Truss episode, or worse.
Speaking in an interview on The Forecast, Haldane said the country's public finances are skating on the thinnest ice. He described the danger as a 'Liz Truss plus' sell-off, meaning a bond market reaction similar to the one seen under Liz Truss but potentially larger.
Haldane said bond markets risk becoming 'the albatross around Andy Burnham's neck' unless the government demonstrates to markets and beyond that it is capable of taking curbs on public spending seriously. Without that, he said, taxes and borrowing can only head north at a time when the UK is maxed out in borrowing terms and taxed out economically.
He explained that if the fiscal ice breaks, it would cause economic problems and prospective political problems. He has been speaking up about the importance of bearing the fiscal cost in the budget, taking the medicine early to avoid the ice cracking.
Haldane said the current government had promised the most radical change in four decades and made a conveyor belt of promises. At the same time, he said the world is going to hell in a handcart, in part because Donald Trump launched a war against Iran more than six months ago. That has pushed up oil prices and inflation expectations, and borrowing costs have ballooned. The landing strip for government spending and taxation within its fiscal rules is therefore narrower and narrower.
He noted that John Healey does not want to signal big tax rises and Andy Burnham certainly does not want to signal big spending cuts. If they dodge big decisions in the budget, Haldane said, it is not clear where that leaves the country. He said dodging is no longer an option. Hard choices are coming next month rather than next year, and muddling through is no longer possible.
The scale of the hole caused by higher borrowing costs and other pressures means the government cannot avoid something hefty on taxes or further significant spending cuts, Haldane said. He put the order of magnitude at five to 10 billion. Ducking, diving, bobbing, weaving and hoping for the best are no longer on the agenda, he added.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | Channel 4 |
|---|---|
| Andy Haldane said substantial tax rises or further significant spending cuts are unavoidable. | |
| Andy Haldane said UK public finances are in a precarious position. | |
| Andy Haldane warned that the UK risks a severe sell-off in government bonds. |
Channel Perspectives
What each channel focused on, with key quotes.
Channel 4 gave Haldane a long interview slot on The Forecast and led on his most dramatic language, including the 'Liz Truss plus' warning and the 'thinnest fiscal ice' metaphor. The segment framed the budget as a moment for hard choices on tax and spending, with no government or market voice to challenge Haldane's view. It also tied the risk to global oil and inflation pressures after Donald Trump's war with Iran.
- “We are skating on the thinnest fiscal ice.”
- “It means a bond market sell-off of the like of which we saw under Liz Truss, but this could be Liz Truss Plus.”
- “I don't think dodging is an option anymore.”
Broadcast Timeline
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