My biggest fear about the government’s borrowing plans

If people feel poorer – even if they don’t have to sell their home – they will cut back on everything else, and that’s what pushes the economy into a more serious recession, writes Hamish McRae

The markets had their say on Friday – and blew a raspberry (AFP via Getty Images)

There were two audiences for Kwasi Kwarteng’s mini-Budget last week, the British voters and the global markets. The voters will have their say in a couple of years’ time, and will be swayed by the alternative now being put together by Keir Starmer. The markets had their say on Friday – and blew a raspberry.

The pound, already weak, plunged further, particularly against the dollar. Gilt yields, already rising, shot up, with the important 10-year rate going to 3.8 per cent, higher than the equivalent US level. And far from acknowledging that the markets matter, the chancellor doubled down on Sunday, promising yet more tax cuts, leading presumably to even higher government borrowings.

This does not look good. It may be inexperience – or perhaps arrogance – on the part of the chancellor, but if you are going to borrow industrial quantities of cash from people, it is common courtesy to listen to their concerns about how you intend to service that debt.