Budget: Hostile market response as chancellor suffers Halloween nightmare

Published

1 year ago

October 31, 2024

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First things first: don’t panic.

What you need to know is this. The budget has not gone down well in financial markets. Indeed, it’s gone down about as badly as any budget in recent years, save for Liz Truss’s mini-budget.

The pound is weaker. Government bond yields (essentially, the interest rate the exchequer pays on its debt) have gone up.

That’s precisely the opposite market reaction to the one chancellors like to see after they commend their fiscal statements to the house.

In hindsight, perhaps we shouldn’t be surprised.

After all, the new government just committed itself to considerably more borrowing than its predecessors – about £140bn more borrowing in the coming years. And that money has to be borrowed from someone – namely, financial markets.

But those financial markets are now reassessing how keen they are to lend to the UK.

The upshot is that the pound has fallen quite sharply (the biggest two-day fall in trade-weighted sterling in 18 months) and gilt yields – the interest rate paid by the government – have risen quite sharply.

This was all beginning to crystallise shortly after the budget speech, with yields beginning to rise and the pound beginning to weaken, the moment investors and economists got their hands on the budget documentation.

But the falls in the pound and the rises in the bond yields accelerated today.

This is not, to be absolutely clear, the kind of response any chancellor wants to see after a budget – let alone their first budget in office.

Indeed, I can’t remember another budget which saw as hostile a market response as this one in many years – save for one.

That exception is, of course, the Liz Truss/Kwasi Kwarteng mini-budget of 2022. And here is where you’ll find the silver lining for Keir Starmer and Rachel Reeves.

The rises in gilt yields and falls in sterling in recent hours and days are still far shy of what took place in the run up and aftermath of the mini-budget. This does not yet feel like a crisis moment for UK markets.

But nor is it anything like good news for the government. In fact, it’s pretty awful. Because higher borrowing rates for UK debt mean it (well, us) will end up paying considerably more to service our debt in the coming years.

And that debt is about to balloon dramatically because of the plans laid down by the chancellor this week.

And this is where things get particularly sticky for Ms Reeves.

In that budget documentation, the Office for Budget Responsibility said the chancellor could afford to see those gilt yields rise by about 1.3 percentage points, but then when they exceeded this level, the so-called “headroom” she had against her fiscal rules would evaporate.

In other words, she’d break those rules – which, recall, are considerably less strict than the ones she inherited from Jeremy Hunt.

Which raises the question: where are those gilt yields right now? How close are they to the danger zone where the chancellor ends up breaking her rules?

Short answer: worryingly close. Because, right now, the yield on five-year government debt (which is the maturity the OBR focuses on most) is more than halfway towards that danger zone – only 56 basis points away from hitting the point where debt interest costs eat up any leeway the chancellor has to avoid breaking her rules.

Now, we are not in crisis territory yet. Nor can every move in currencies and bonds be attributed to this budget.

Markets are volatile right now. There’s lots going on: a US election next week and a Bank of England decision on interest rates next week.

The chancellor could get lucky. Gilt yields could settle in the coming days. But, right now, the UK, with its high level of public and private debt, with its new government which has just pledged to borrow many billions more in the coming years, is being closely scrutinised by the “bond vigilantes”.

A Halloween nightmare for any chancellor.

UK

Donald Trump confirms he will sue the BBC over Panorama edit – despite broadcaster’s apology

Published

17 hours ago

November 15, 2025

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Donald Trump confirms he will sue the BBC over Panorama edit - despite broadcaster's apology

Donald Trump has said he will sue the BBC for between $1bn and $5bn over the editing of his speech on Panorama.

The US president confirmed he would be taking legal action against the broadcaster while on Air Force One overnight on Saturday.

“We’ll sue them. We’ll sue them for anywhere between a billion (£792m) and five billion dollars (£3.79bn), probably sometime next week,” he told reporters.

“We have to do it, they’ve even admitted that they cheated. Not that they couldn’t have not done that. They cheated. They changed the words coming out of my mouth.”

Mr Trump then told reporters he would discuss the matter with Prime Minister Sir Keir Starmer over the weekend, and claimed “the people of the UK are very angry about what happened… because it shows the BBC is fake news”.

The Daily Telegraph reported earlier this month that an internal memo raised concerns about the BBC’s editing of a speech made by Mr Trump on 6 January 2021, just before a mob rioted at the US Capitol building, on its flagship late-night news programme.

The concerns regard clips spliced together from sections of the president’s speech to make it appear he told supporters he was going to walk to the US Capitol with them to “fight like hell” in the documentary Trump: A Second Chance?, which was broadcast by the BBC the week before last year’s US election.

Following a backlash, both BBC director-general Tim Davie and BBC News chief executive Deborah Turness resigned from their roles.

‘No basis for defamation claim’

On Thursday, the broadcaster officially apologised to the president and added that it was an “error of judgement” and the programme will “not be broadcast again in this form on any BBC platforms”.

A spokesperson said that “the BBC sincerely regrets the manner in which the video clip was edited,” but they also added that “we strongly disagree there is a basis for a defamation claim”.

Earlier this week, Mr Trump’s lawyers threatened to sue the BBC for $1bn unless it apologised, retracted the clip, and compensated him.

Legal challenges

But legal experts have said that Mr Trump would face challenges taking the case to court in the UK or the US.

The deadline to bring the case to UK courts, where defamation damages rarely exceed £100,000 ($132,000), has already expired because the documentary aired in October 2024, which is more than one year.

Also because the documentary was not shown in the US, it would be hard to show that Americans thought less of the president because of a programme they could not watch.

Newsnight allegations

The BBC has said it was looking into fresh allegations, published in The Telegraph, that its Newsnight show also selectively edited footage of the same speech in a report broadcast in June 2022.

A BBC spokesperson said: “The BBC holds itself to the highest editorial standards. This matter has been brought to our attention and we are now looking into it.”

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UK

Banksy art theft lands burglar with 13-month prison sentence

Published

21 hours ago

November 14, 2025

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Banksy art theft lands burglar with 13-month prison sentence

A man has been given a 13-month prison sentence for stealing Banksy’s famous Girl With Balloon print from a London gallery.

Larry Fraser, 49, of Beckton, east London, was sentenced on Friday after pleading guilty to one count of non-residential burglary at Kingston Crown Court on 9 October.

The print, one of the street artist‘s most famous, was stolen from a gallery in New Cavendish Street in London at around 11pm on 8 September last year.

Fraser used a hammer to smash his way through a glass entrance door at the Grove Gallery before stealing the artwork, which was valued at £270,000.

He concealed his identity with a mask, hooded jacket and gloves, but the Metropolitan Police’s Flying Squad was able to identify him and track him to a location streets away.

He was also caught on CCTV loading the artwork into a van before fleeing the scene.

A second man, 54-year-old James Love, was accused of being the getaway driver in the burglary, but cleared of stealing the print.

Fraser was arrested at his home address on 10 September, within 48 hours of the burglary, and charged the next day.

Officers were able to recover the artwork after executing a warrant on the Isle of Dogs. It has now been returned to the gallery.

Fraser pleaded to the court that he was struggling with a historic drug debt and agreed to steal the work “under a degree of pressure and fear”.

He said he did not know what he would be stealing, nor its value, until the day of the offence.

Jeffrey Israel, defending, said Fraser lived with his mother as her principal carer, and had only managed to “break his cycle of drug addiction” after his last prison sentence.

He added that it “would take a bold advocate” to suggest that the value of the print had increased by the burglary, but insisted “that is probably the reality”.

Judge Anne Brown was unmoved, however, and said the offence was “simply too serious” for a suspended sentence.

“This is a brazen and serious non-domestic burglary,” she said.

“Whilst you did not know the precise value of the print, you obviously understood it to be very valuable.”

She added: “Whilst I am sure there was a high degree of planning, this was not your plan.”

However, Fraser may be eligible for immediate release due to time spent on electronic curfew.

Detective Chief Inspector Scott Mather, who led the Met’s investigation, said: “Banksy’s Girl With Balloon is known across the world – and we reacted immediately to not just bring Fraser to justice but also reunite the artwork with the gallery.

“The speed at which this took place is a testament to the tireless work of the flying squad officers – in total it took just four days for normality to be restored.”

The 2004 artwork was part of a £1.5m collection of 13 Banksy pieces at the gallery.

Gallery manager, Lindor Mehmetaj, said it was “remarkable” for the piece to have been recovered after the theft.

The 29-year-old said: “I was completely, completely shocked, but in a very, very positive way when the Flying Squad showed me the actual artwork.

“It’s very hard to put into words, the weight that comes off your shoulders.”

UK

‘Incredibly dangerous’ sex offender Chao Xu jailed – as police say there could be hundreds more victims

Published

21 hours ago

November 14, 2025

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'Incredibly dangerous' sex offender Chao Xu jailed - as police say there could be hundreds more victims

An “incredibly dangerous” sex offender who drugged his victims and installed spy cameras around his home has been jailed for life with a minimum term of 14 years – as police appeal for hundreds more potential victims to come forward.

Warning: This article contains details of sexual offences

Chinese national Chao Xu, 33, has been described by police as “one of the most prolific offenders ever uncovered” by the Metropolitan Police.

Xu, who was a law postgraduate student at the University of Greenwich in London between 2015 and 2016, ran his own recruitment business and targeted victims at networking events at his home.

He invented his “Spring of Life” cocktail, a mix of alcohols and Chinese herbal medicines, to sedate guests, and planted spy cameras in items including air fresheners, sanitary packaging and speakers.

Police found thousands of pictures and videos, with some showing unconscious or incapacitated victims in his flat in Greenwich, south-east London.

Xu, who is from China but is believed to have been living in the UK since 2013, also covertly filmed women on their daily commutes at stations such as London Bridge in so-called upskirting incidents.

He pleaded guilty to 24 sex offences between 2021 and 2025 at Woolwich Crown Court in August relating to six victims, with two charges relating to a seventh woman left to lie on file.

Xu admitted four counts of rape, eight counts of assault by penetration, four counts of sexual assault, four counts of voyeurism, two counts of administering a substance with intent and two counts of operating equipment beneath the clothing of another without consent (commonly known as upskirting).

‘Incredibly dangerous man’

His Honour Judge Christopher Grout described Xu as an “incredibly dangerous man” who “took great enjoyment” from his offending.

“Your behaviour was calculated and planned, evidenced by the covert recording systems you had set up in your flats and the fact you had incapacitated a number of your victims by drugging them.

“You betrayed the trust of a number of women who you befriended in the most appalling ways imaginable,” he added.

Could be hundreds of victims

Another 11 alleged victims have since come forward but the Metropolitan Police believe there are hundreds more in the UK and China, with offences committed in workplaces, public spaces and overseas.

Acting Detective Superintendent Lewis Sanderson described Xu as one of the “most prolific” offenders the force has ever investigated, adding that his “crimes were calculated, sustained, and devastating”.

Speaking outside the court on Friday, he said: “Chao Xu was a prolific and predatory sexual offender who committed some of the most cowardly and abhorrent crimes imaginable. His actions caused deep and lasting harm.”

“The number of victims of sexual assault, voyeurism and upskirting is believed to be in the hundreds. This includes individuals filmed without consent in Xu’s flat at his workplace and in public spaces.

“That is why today I’m making a direct appeal. If you believe you may have been a victim of Chao Xu, or if you have any information that could assist our investigation, please come forward. You will be listened to. You will be believed and you will be supported.”

He said all of the sexual assault victims were Chinese women, aged between 18 and 30, while the voyeurism victims are also young females but of different ethnicities.

He added that there will be women who may not know they are victims of his crimes, as they may have been drugged by Xu.

Detectives were alerted to Xu’s crimes after he held a networking event in Greenwich in June.

When one of the women who attended became unwell, Xu offered to let her stay, before raping her several times, the Metropolitan Police said.

They later found he had drugged her with substances known to cause drowsiness and incapacitation.

The case included six million messages on WeChat, the popular Chinese messaging app, most of them in Mandarin, which all had to be checked with the help of a translator.