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Best of the Spectator

Coffee House Shots: Reeves's worst week so far?

Best of the Spectator

The Spectator

News Commentary, News, Daily News, Society & Culture

4.4785 Ratings

🗓️ 18 January 2025

⏱️ 17 minutes

🧾️ Download transcript

Summary

It's been a tricky week for Rachel Reeves: an onslaught of criticism for the levels of borrowing costs, GDP at 0.1 per cent, and stagflation still gripping the UK economy. Remarkably she has come out of it looking stronger – politically at least. But can she afford to celebrate? The Spectator's Kate Andrews and data editor Michael Simmons join the podcast to discuss the economy, and go through some of the most striking graphs from The Spectator's data hub this week.

Produced by Natasha Feroze.

Transcript

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0:00.0

The Spectator magazine is home to wonderful writing, insightful analysis, and unrivaled books and arts reviews.

0:05.1

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0:11.8

Go to spectator.com.com.com.com.com. Hello and welcome to Coffee House Shots, the Spectator's Daily Politics Podcast. I'm Kate Andrews, our economics editor, and I'm joined by Michael Simmons, our data editor.

0:27.2

Michael, the biggest story of the week has got to be the borrowing costs for the UK government. Whilst it does seem like they peaked midweek and are back to where they were at the start of the month. We're still looking

0:37.9

at incredibly painful figures for the government, long-term borrowing costs at a 30-year high.

0:43.1

They have surpassed where they were at the peak of Liz Truss's mini budget. What do you make of it?

0:49.6

It's a tiny bit of good news in that it started to go back down. But, you know, as you say,

0:55.7

these are still, you know, near 30 year high prices for the cost of borrowing, which is not

1:01.7

surprising when we have a chancellor that's delivered a budget that the markets don't seem to

1:07.7

have faith in. But also, borrowing costs being this high is kind of not

1:11.5

surprising when you look at the fact that the country's debt is basically worth 100% of the

1:17.6

country's GDP. So when you're in a state like that as an economy, investors, lenders are not

1:24.9

going to have faith in your country, you know, to lend to. So yes, it's a tiny

1:30.7

bit of good news, but I mean, Rachel Reeves, I would say, is by no means out of any sort of

1:36.0

woods. How do you think she's handled it this week? She's had a surprisingly good week,

1:41.5

given the situation is rather dire, as you say, even though it seems like

1:45.1

borrowing costs for now have peak. They're still substantially higher than what the office or budget

1:49.8

responsibility predicted around the budget. That is billions and billions of pounds that she has to

1:56.0

find that she can't spend on what she might like to spend it on, but that she will need to service

2:00.2

the debt.

2:05.6

It's not a fun thing to pay off. It's money you've already spent. So I think it's a very tricky situation for her, but I was actually quite surprised how confident she was when she went

2:11.5

into the House of Commons to answer questions about her trip to China, but what the opposition

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