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Labour’s leftward shift and the bond vigilante threat

The UK’s debt mountain would constrain a new prime minister’s choices — and could make further tax rises more likely

In the sweaty vaults beneath Walkers pub in London’s Whitehall this week, the drinking temporarily stopped and the mood darkened. Angela Rayner, until recently Britain’s deputy prime minister, lowered her voice and warned her audience that the country’s governing Labour Party is facing an existential crisis.

Putting aside her glass of house white wine, Rayner told her audience from the centre-left campaign group Mainstream that Sir Keir Starmer’s government was “running out of time” and had to change. “Like other social democratic parties across the west, the very survival of the Labour Party is at stake. It is that serious.”

Unlike Labour’s moribund social democratic sister parties in France, Italy and Germany, Starmer’s party is in power with a huge House of Commons majority. But, like those European parties, Britain’s Labour Party is in grave trouble, trying to work out how to tackle populist parties on both the right and the left. “Political parties have no right to exist,” Rayner warned.

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