Simon French, Chief Economist and Head of Research at Panmure Liberum and former economic adviser with the UK Civil Service, warns the Telegraph that Reform UK’s ridiculous economic plan – particularly the massive tax cuts that no-one outside of themselves believes they could possibly pay for – will likely trigger a run on the pound.
Those plans that we think would create an immediate fiscal gap of £70bn-£80bn per year – would in our view create the high probability of an immediate and violent sterling crisis.
The fact that the result of their plan would increase the deficit “two-to-three times” larger than even the damaging plan that led to Liz Truss’ quick ousting as Prime Minister would cause at least the same issues, but magnified.
Experimentation with an immediately higher fiscal deficit profile – of an additive scale set to be two-to-three times larger than anything attempted by the 2022 mini-Budget or 2024 October Budget – would create sharp rises in UK sovereign, commercial
and household interest rates in our view.
This of course would be even more damaging to the already-precarious financial situation of the average British household.