BORIS JOHNSON: Rachel from Accounts was scolded. It's time for her to go to HR and get her P45 back – or stay in China, where they're almost as communist as she is…

There is only one product that really matters to the UK economy. It is the only resource on which the whole country, each of us, depends.

It is more vital to our national prosperity than every ounce of gold in the Bank of England or all the oil and gas in the North Sea.

As soon as this substance runs out, every family in the country finds itself facing real economic difficulties. This precious substance is trust.

I'm talking about confidence in the British government, confidence in our economic policy; and above all, confidence in the person who manages nations finances the Chancellor of the Exchequer.

There is a simple reason why international investors are pulling out of Britain and why they are demanding ever higher interest rates as the price to fund our borrowing.

There is a major explanation for the weakness of the pound, why the Labor government is being forced by the markets to pay more and more to service our debts, and why bond yields stocks rose to their highest level since the 2008 crash.

I fear that the atmosphere will be the same in Frankfurt, Tokyo and New York. Global bond markets are losing confidence in Rachel Reeves and her economic policies. They are losing confidence because it is now clear that neither she nor Keir Starmer have a clear growth plan.

Labor has done everything it can, since coming to power last July, to undermine business confidence. When they took power, they inherited the fastest growing economy in the G7. Reeves and Starmer set out to demoralize and sometimes demonize wealth creators in the UK and abroad.

Rachel Reeves meets with Chinese Finance Minister Lan Fo'an in Beijing today

Rachel Reeves found herself in a nightmare position as her October budget was so poorly judged that it derailed her own growth plans and reduced her own income, writes BORIS JOHNSON.

Far from defending Britain and its potential, the new government has denounced the country and its budgetary situation. Far from encouraging or liberating British businesses, they immediately announced a huge program of additional non-wage costs, new legislation allowing people to work from home and plans to prevent bosses from contacting their staff out of hours office.

They have done nothing to take advantage of the freedoms of Brexit, on the contrary, they seem to be preparing to reintegrate the UK into the sclerotic EU single market, so that we become a slave state, accepting the laws of Brussels without be able to develop them ourselves. .

Global financial markets have lost confidence in Reeves because they see that she and Starmer govern more like Jeremy Corbyn than Tony Blair, constantly trying to appease their union paymasters, constantly moving to the left.

They can read the news, these bond market stockbrokers; they can see what is happening in Britain. When the Labor government gave inflationary pay bonuses to train drivers and doctors, it did not go unnoticed. The world noticed that no improvement was needed in public sector productivity and took note.

When Reeves and Starmer decided to abandon government reform, ending our plan to cut 66,000 jobs in Whitehall, global money markets watched and bit their teeth. To maintain your credibility with the markets, you must show that you are prepared to pursue reforms, continue to fight government waste, and rein in spending.

Reeves gave the opposite impression. She has shaken market confidence because she appears to be a true left-wing class warrior.

Judging by his social media posts, Reeves is positively exulting in the destruction of fee-paying schools. One by one, these independent schools are now closing, brutally punished by the imposition of a 20 per cent Labor tax through the addition of VAT to education fees.

Britain today is an extreme exception: no other country in Europe taxes schools in this way. Frankly, it makes you cry to see these old schools going to the wall. How does it help? Where is the tax revenue from a school that went bankrupt? How does it help the taxpayer if these children now have to be educated by the state?

This policy is nothing more than a Pol Pot-style race to the bottom and only serves to satisfy the resentments of Reeves and Starmer (and never forget that the fact that he himself benefited from paid education is a measure of the Prime Minister's supreme hypocrisy). , although funded by grants).

Global markets have lost confidence in Reeves because they are starting to think that she really is an old-fashioned fiscalist and a spendthrift socialist and they are right.

Above all, they lost trust for the same reason that any of us loses trust in another human being. She lied. And they can see that she lied.

She and Starmer went into last year's general election saying they would not raise taxes on workers and millions of people in British business felt deeply reassured.

They then broke that promise in the October budget by hitting businesses across the country with a $25 billion increase in national insurance, a tax on the wages of all private sector workers in Britain .

At this point, British businesses already had their heads down. They had endured months of sadness and negativity from Reeves; but the budget created a classic socialist doom loop. By hurting businesses, tax increases have discouraged investment and frozen job creation. And by stifling economic activity, they of course reduced tax revenues.

This is why we find ourselves in this gloomy situation, at the start of 2025, with all the indicators flashing red.

Jobs are being lost, business confidence is low and, unlike other countries, we cannot today hope for an early cut in domestic interest rates as the obvious remedy, because inflation is already stubbornly high; driven, of course, by Reeves' own policies of excessive payroll taxes and excessive public sector pay deals.

Rachel Reeves found herself in a nightmare position, as her October budget was so catastrophically misguided that it derailed her own growth plans and reduced her own income.

The result is that she will almost certainly have to break her word, because she will either have to cut spending and infuriate her own MPs, or she will have to go back to the country, in the March budget, and raise taxes. Again. Both options are bad; both would further weaken economic activity, not to mention tax revenues; and the death spiral will continue.

It was Reeves, and Reeves alone, who created this disaster. She is the one who has lost the confidence of the market and that is the one thing no chancellor can afford to lose.

She made too many financial mistakes. She has no growth plans. She clearly does not understand that the prosperity of a nation depends on a happy and confident private sector. She has defrauded the public about her plans to raise taxes and her own resume. She was scolded.

It's time for Rachel from accounting to head to HR and collect her P45. Or maybe she could just stay in China, where they're almost as communist as she is.

I guess Starmer can do it again. He has his absurd parliamentary majority. But he has to start again with a new Chancellor of the Exchequer.