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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.

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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.

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Chancellor challenged over gilt yield spike

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.

Rachel Reeves and Chief Secretary to the Treasury Darren Jones prepare to leave 11 Downing Street
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Rachel Reeves leaving 11 Downing Street before the budget. Pic: PA

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.

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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.

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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.

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James McMurdock: Reform MP previously jailed for repeatedly kicking girlfriend questioned by Sky News at party conference

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James McMurdock: Reform MP previously jailed for repeatedly kicking girlfriend questioned by Sky News at party conference

Reform UK is a party that’s vying for attention and is not ashamed of how it gets it.

With political support from Elon Musk this week amplifying Reform UK talking points on his platform X, the party has been able to make a splash in the new year ahead of the government.

Already this month the party has had two conferences in two days, and with only a handful of MPs there is opportunity for all of them to speak. With one notable exception – James McMurdock MP.

Despite being the MP for South Basildon and East Thurrock, he isn’t on the schedule for the East of England conference, with Sky News initially told he wasn’t planning on attending.

Controversy has surrounded the politician since it was unveiled that he was jailed nearly two decades ago for repeatedly kicking his then girlfriend in 2006 while drunk outside a nightclub – something not made public when he was standing to be an MP.

Reform UK leader Nigel Farage and the new Reform MP for South Basildon and East Thurrock, James McMurdock, pose for a photo during the inaugural match of East Thurrock CFC at Wyldecrest Sports Country Club, Corringham, Essex. Picture date: Saturday July 6, 2024.
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Reform UK leader Nigel Farage and Mr McMurdock last summer. Pic: PA

When it emerged last July that he had been jailed for attacking someone, he downplayed the incident as a “teenage indiscretion”.

When spotted strolling around the conference on Saturday, Sky News asked Mr McMurdock whether he regretted that term.

The MP would not apologise for the phrase and said he hadn’t lied or ever changed his story.

“I would like to do my best to do as little harm to everyone else and at the same time accept that I was a bad person for a moment back then,” he said.

“I’m doing my best to manage the fact that something really regrettable did happen.”

Read more from Sky News:
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Reform UK leader Nigel Farage speaking during the Reform UK East of England conference at Chelmsford City Racecourse. Picture date: Saturday January 4, 2025.
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Mr Farage speaking during Reform UK’s East of England conference on Saturday. Pic: PA

The MP also wouldn’t say whether the party knew about his conviction prior to becoming a candidate, but leader Nigel Farage has previously said he “wasn’t vetted”.

Mr McMurdock still has not been suspended for the conflicting accounts of what happened and the party hasn’t commented on whether he would pass their new vetting system which they say is now in place for new council candidates.

One Labour MP has urged parliament and the government to make mandatory Disclosure and Barring Service (DBS) checks for any prospective parliamentary candidates in the future.

While speaking to Sky News, Mr McMurdock said he would support that motion, though no Reform MP voted for it in an early day motion when it was laid in parliament.

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Parliament urged to begin mandatory DBS criminal record checks on new MPs and peers

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Parliament urged to begin mandatory DBS criminal record checks on new MPs and peers

MPs and peers could be forced to submit to criminal record checks under proposals submitted by a new Labour MP.

In a letter seen by Sky News, Jo White urged the leader of the Commons to examine whether a new committee set up to modernise parliament should force all new members to have checks due to their access to young and vulnerable people.

She suggests in-depth background checks by the Disclosure and Barring Service – commonly known as DBS checks – as the initial stages of introducing MPs to parliament.

Candidates are currently banned from running to be an MP if they have been jailed for more than a year in the UK.

However, there is no requirement for DBS checks, something most other jobs require when applying for positions working with vulnerable people.

Ms White previously submitted an early-day motion on this issue, with cross-party signatures including 13 other Labour MPs supporting her motion.

In her letter to the committee, the Bassetlaw MP writes: “It is a privilege that, as parliamentarians, we can work with local schools, care homes and hospitals, but we must be proactive in preserving this trust.

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“Implementing a mandatory check would protect both the people we visit and ourselves. It would be key to maintaining public trust and high workplace standards across the estate and in our constituencies.”

DBS checks are standard practices for GPs, nurses, teachers and other professions. They let potential employers know if a candidate has a criminal record or is banned from working with children or vulnerable adults.

Many local authorities already run DBS checks on elected officials but it’s not standard practice in parliament.

Prospective MPs can stand for election despite having a criminal record or appearing on the child-barred list or adult-barred list unless they have served a prison term over 12 months.

In fact, they do not need to disclose any criminal behaviour to the public prior to becoming a candidate.

The main vetting process before entering the House of Commons is done through political parties, who set their own rules for carrying out any such checks.

MP James McMurdock (right) was convicted of assaulting his then girlfriend in 2006. Pic: PA
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MP James McMurdock (right) was convicted of assaulting his then girlfriend in 2006. Pic: PA

None of the Reform UK MPs have signed the early-day motion and leader Nigel Farage said last election there was “no vetting” of candidates.

This has already caused some controversy.

One Reform MP, James McMurdock, was jailed 19 years ago for repeatedly kicking his then girlfriend, according to court documents disclosed by The Times.

The South Basildon and East Thurrock MP attacked her in 2006 while drunk outside a nightclub and spent 21 days in a young offenders’ institution.

He had not publicly disclosed the conviction and described it as a “teenage indiscretion” when asked about the incident last year.

Under new rules, new MPs might have to fully disclose their criminal past.

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The creation of a modernisation committee was a Labour manifesto promise and now sits as a cross-party group tasked with reforming House of Commons procedures and improving standards.

The committee said it would not be commenting on submissions until it’s had time to fully consider all options, but is due to publish an initial report early this year.

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Nigel Farage rejects Tommy Robinson after support from Elon Musk

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Nigel Farage rejects Tommy Robinson after support from Elon Musk

Nigel Farage has said Tommy Robinson “won’t be” joining Reform UK after Elon Musk showed support for the jailed far-right activist on social media.

The billionaire owner of X, who has spoken positively about Reform UK and is reportedly considering making a donation to the party, has been critical of the government’s handling of child sexual exploitation across a number of towns and cities more than a decade ago.

While the Reform UK leader described the billionaire owner of X as “an absolute hero figure, particularly to young people in this country”, he distanced himself and his party from Robinson, who is currently serving an 18-month prison sentence for contempt of court.

Mr Musk endorsed the far-right activist and claimed Robinson was “telling the truth” about grooming gangs, writing on X: “Free Tommy Robinson”.

Speaking to broadcasters ahead of the start of Reform UK’s East Midlands Conference tonight, party leader Mr Farage did not directly address Mr Musk’s comments, but said: “He has a whole range of opinions, some of which I agree with very strongly, and others of which I’m more reticent about.”

He went on to say that having Mr Musk’s support is “very helpful to our cause”, describing him as “an absolute hero figure, particularly to young people in this country”.

He continued: “Everyone says, well, what about his comments on Tommy Robinson? Look, my position is perfectly clear on that. I never wanted Tommy Robinson to join UKIP, I don’t want him to join Reform UK, and he won’t be.”

Reform UK leader Nigel Farage speaking to broadcasters
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Reform UK leader Nigel Farage has said that Tommy Robinson will not be joining the party

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Later on GB News, Mr Farage added that Mr Musk “sees Robinson as one of these people that fought against the grooming gangs”.

“But of course the truth is Tommy Robinson’s in prison not for that, but for contempt of court,” he said.

Mr Farage added: “We’re a political party aiming to win the next general election. He’s not what we need.”

How did Elon Musk become involved?

The online campaign from Mr Musk began after it emerged that Home Office minister Jess Phillips had denied requests from Oldham Council to lead a public inquiry into child sexual exploitation in the borough, as the Conservatives had done in 2022.

In a letter to the authority in Greater Manchester, Ms Phillips said she believes it is “for Oldham Council alone to decide to commission an inquiry into child sexual exploitation locally, rather than for the government to intervene”.

An Oldham Council spokesman previously said: “Survivors sit at the heart of our work to end child sexual exploitation. Whatever happens in terms of future inquiries, we have promised them that their wishes will be paramount, and we will not renege on that pledge.”

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Mr Musk posted on X multiple times about the scandal, and claimed Sir Keir Starmer had failed to bring “rape gangs” to justice when he led the Crown Prosecution Service (CPS). In 2013, Sir Keir introduced new guidelines for how child sexual abuse victims should be treated and how a case should be built and presented in court.

The SpaceX and Tesla boss also endorsed posts about Robinson.

Robinson, who is 42 years old and whose real name is Stephen Yaxley-Lennon, admitted at Woolwich Crown Court in October to breaching an injunction banning him from repeating libellous allegations against a Syrian refugee schoolboy, after he was successfully sued for libel in 2021.

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