It has been a very long time since we have seen a G7 economy experience what the UK has in the past six days — disorderly moves in its currency and bond markets, a loss of confidence in policymakers, direct central bank intervention in the government bond market, pressures for an emergency rate rise, and a warning from the IMF.
If the disorder is allowed to persist, the consequential adverse economic and financial effects for the UK, already concerning, are just starting.
The catalyst for this momentous time in UK economic history was an overambitious policy package aimed at generating economic growth and lowering inflation. Structural reforms to boost economic growth and the stabilisation of energy prices, both welcomed moves, were accompanied by an unsettlingly large, relatively regressive and unfunded tax cut.