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Friday, August 1, 2025
WorldBank of England: 'Don't panic, we know what we're doing'

Date:

Bank of England: ‘Don’t panic, we know what we’re doing’

This afternoon, the Treasury and the Bank of England made an effort to reassure. The message was crystal clear: Don’t worry; we have you covered.

Privately among some Conservative MPs though, there’s a fear the government doesn’t.

And so politically, a tussle for perhaps the biggest prize of the lot: the mantle of economic credibility.

For years, this has been an Achilles’ heel for Labour; pummelled by Conservative opponents labeling them fiscally incontinent; unable to restrain the urge to tax, borrow and spend.

But they are now attempting to turn that charge around on the Tories, and allow themselves to imagine this might be a moment – like Black Wednesday 30 years ago – where events spiral beyond the government’s control and so mug ministers of reputations, never to properly return.

Others, though, counsel caution… this moment may pass; pressures may ease.

Plenty within Labour still see a landscape changing; a willingness to be listened to again.

What we are witnessing in the markets are the short-term consequences of Friday’s statement from the chancellor.

But there will be long-term consequences too – that will shape the political debate between now and the next election.

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