[smt88]

You're starting with an assumption that right-wing governments are good for economies. Let's ignore that dubious assumption and instead look at the actual policy.

Truss's administration is giving tax cuts to the wealthy and paying for it by borrowing. The markets know that trickle-down economics is nonsense and these tax cuts won't boost UK's economy enough to cover the enormous amount of debt required to pay for them.

[kypro]

It's probably not this. Part of the issue here is that markets do believe this will boost demand in the UK economy. It's just that this isn't good right now with inflation so hot. If anything you want to be increasing tax to lower demand.

As an investor you always want your investments to yield more than the rate of inflation and when government policy increases inflationary pressures by fuelling growth the market will demand higher interest rates. Of course there is also uncertainty about how the government will pay for the debt which is increasing the risk premium.

It's just dumb fiscal policy to boost growth at a time when central bankers are trying to do the opposite. It would probably work great during a deflationary period. Its just that's not where we are right now.

[icare_1er]

"Good for economies" does not mean much, and that's what distinguishes the left and the right.

Usually, the right-wing, and the "markets", agree on what is good for the economy. It is quite unique to see the "markets" disagree so strongly with "the right".

And it is also worth noting that it is quite rare to see left people use the view of Wall Street as an argument ! I remember many cases in Europe where socialists governement almost used it as an electoral argument that they would ignore "the markets" (or rating agencies) and not dictated their policy by what they said

[caoilte]

That sort of fantastical thinking is quite rare outside of fringe parties (left and right). The UK Labour party's spending plans in 2019 were fully costed exactly in order not to spook the markets. (Naturally that's not how the media portrayed the situation of course.)

Ignoring the markets hasn't been possible since Nixon ended the gold peg.

[mathieuh]

"I will never be ashamed of quoting a bad author as long as the line is good" – Seneca