The current situation in the UK.
Markets in turmoil: 30-year yields at 5.69%, the highest since 1998; sterling falling.
Starmer shakes up his team: an excessive revamp of the team to reassure investors.
Reeves under pressure: after being targeted by the opposition, she is now being targeted by the markets, too.
Global macro environment: fear that the deficit is destined to widen dramatically is causing the yield spread to widen.
The future is yet to be written: if rates remain unchanged, Starmer is in danger.
Starmer was supposed to be the new Churchill, but all things considered, I fear he's going down in history as the new Mr. Bean[1]. I'm sorry, but that's the way things are. Since entering Downing Street, it's fair to say he hasn't gotten anything right yet. Let's be clear: Starmer has made his moves; the problem is that each move has been followed almost immediately by a backtracking. The epilogue is recent and is there for all to see. The market has shouted "Enough!" The United Kingdom is as indebted as that wealthy, older man who, in the final years of his life, despite creditors continuing to knock on his door, stubbornly insisted that even the trimmings on his curtains were made of gold. In the end, who pays? Judging by recent events and the moves Starmer has made, it seems clear to me that he doesn't have many friends around him; in fact, he has changed practically his entire inner circle of closest collaborators. Reeves has essentially been placed under special administration and cornered, as if he'd been told, "I'm not firing you because I respect you, but maybe you should fire yourself."
Let’s dig in.