The Tories and their supporting press, seem to have forgotten the catastrophic fallout from Liz Truss’s fiscal plans in the autumn of 2022, which sent the gilts market into freefall and catapulted the UK’s pensions industry into chaos.

The Tory media is relentless in its criticism of Rachel Reeves’ budget. Headlines like the Express’s on January 13, “Britain under ‘tax assault’ from ‘inept’ Labour,” are typical of the ongoing smear campaign against the Chancellor.

It followed the Sunday Mail, which published a piece on how to “protect your money from Rachel Reeves’ MARKET MAYHEM.” Similarly, the Sunday Times dedicated its front page to warning of Reeves’ “war on waste,” as Labour critics circle.’

The article claims that after a “week of turmoil in the financial markets,” support for the Chancellor “has evaporated,” with even her early backers now wavering.

The Telegraph also jumped in with a headline calling Reeves’ budget “disastrous,” claiming it would add more than £1,000 to mortgage costs. It references the shadow chancellor Mel Stride’s comments that Reeves’ decisions are “destroying growth, pushing up inflation” and “severely punishing” homeowners.”

To make matters worse for Reeves, the Conservatives seized on her recent trip to China. The Chancellor defended the visit, explaining that it would secure £600 million for the UK over the next five years and that developing a long-term relationship with China was “squarely in our national interest.”

But for her critics, the trip provided yet more ammunition.

On GB News, Camilla Tominey grilled Mel Stride on whether Reeves should resign. In a painful-to-watch interview, Tominey asked the usual tired, cliched question: “In your opinion, is this woman competent? Rachel from accounts, she’s being branded. She’s over exaggerated her qualifications on her CV. You’re the shadow chancellor. Should she resign? Is the current chancellor up to the job?”

Stride responded that Reeves’ judgment had been “very poor” and questioned her decision to engage with China at this moment.

Ironically, yet not surprisingly, the Tories and their supporting press, seem to have forgotten the catastrophic fallout from Liz Truss’s fiscal plans in the autumn of 2022, which sent the gilts market into freefall and catapulted the UK’s pensions industry into chaos.

In an interview in August, Reeves explained how “millions of people are still paying the price for Liz Truss’ disastrous mini-budget, and she’s now having to make difficult decisions to fix the economy.

Yet the right-wing media is relishing the news that UK borrowing costs have reached their highest point since just before the 2008 global financial crisis. The yield on five-year gilts, which measures the interest the government pays to borrow, has surged to 4.5 percent, nearly five times higher than it was a decade ago, and surpassing even the levels during the Truss-era meltdown.

But as Jonathan Portes, professor of economics at King’s College London, rhetorically asks:

“Have the so-called bond vigilantes come after Rachel Reeves, selling off their holdings of government bonds en masse as they did after Truss and Kwasi Kwarteng’s budget? Not really.”

Portes urges Reeves and Starmer to “hold their nerve” to avoid “another lost decade,” warning that the real source of the rise in borrowing costs lies not with Reeves, but in global economic trends, particularly those in the US. While UK inflation has been stubbornly high, much of the increase in borrowing costs can be attributed to global factors, including US growth and inflation.

“The Truss debacle was the consequence of a toxic cocktail of irresponsible tax cuts, institutional vandalism and a near-death spiral in an obscure part of the pensions market, all of which were UK-specific. By contrast, since the start of 2023, UK long-term interest rates have broadly followed US ones upwards… It’s this, far more than anything the new UK government has done, that has driven the rise in borrowing costs,” he writes.

The storm surrounding Rachel Reeves’ budget is yet another predictable slur by the Tories and their media minions. The year may have begun with some financial uncertainty, but the relentless criticism says little about the economic reality. Far from any genuine fiscal missteps by Labour so far, it masks the chaos and mismanagement left in the wake of the Conservatives’ own disastrous policies.

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