Rachel Reeves Is in a Tax Death Spiral: Marcus Ashworth

The gilt market is voting with its feet again after reports that UK Chancellor of the Exchequer Rachel Reeves will do a major U-turn on her plans to hike income taxes in this month’s budget.

The Labour government’s latest embarrassing volte-face is being presented as the result of a nice surprise from Britain’s Office for Budget Responsibility, which had warned of a big budget hole caused by the UK’s ailing productivity. The hole will be slightly less gaping, apparently, so cue the celebrations. This is almost certainly bogus and the bond market can see straight through it.

Reeves has spent the past ...