Rachel Reeves is making the same mistake as Liz Truss

Rachel Reeves returns from China this morning to face growing accusations that she has lost her grip on the public finances. This latest bond market crisis has brought into question whether the Chancellor is at risk of – or has already – broken her own fiscal rules. Capital Economics reports that a surge in gilt yields – which are at their highest levels since the financial crash – means that her £12 billion of fiscal headroom is now gone. The Treasury will be desperately hoping that something, anything, calms the markets this week and sees borrowing costs start to fall. Reports that the Chancellor has called on ministers to come up with some quick and spectacular ideas to grow the economy over the weekend are unlikely to cut it.

Unsurprisingly the return of a jittery bond market has reignited the debate about who, exactly, ‘crashed the economy’. Liz Truss sees this not just as a moment to return the treatment Keir Starmer showed her in 2022, but to clear her name.