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However, it is important to put the latest market movements in context. <\/p>\n
Since Wednesday the effective interest rate on government borrowing has gone up by just under a quarter of a percentage point and the pound had gone down by less than a percentage point.<\/p>\n
The moves are about a tenth of the size of those seen after the mini-Budget. <\/p>\n
For example, the pound is down 0.8% against the dollar, to a two-month low.<\/p>\n
By this stage after the mini-Budget it was down 8% against the dollar – to an all-time low.<\/p>\n
There has also been a wider rise in borrowing costs over the past month, but that has been a global movement, led by the US.<\/p>\n<\/div>\n<\/div>\n
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The jump in how much the government has to pay to borrow is a signal that investors regard lending it money as being a bigger risk.<\/p>\n
On Thursday, Sir Keir Starmer’s spokesperson said there had been reaction from “bodies such as the IMF welcoming [the government’s] approach”.<\/p>\n<\/div>\n<\/div>\n
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In the Budget, Reeves announced nearly \u00a370bn of extra spending a year, funded by tax increases for business and extra borrowing.<\/p>\n
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the investor reaction had also been sparked by an expecation that interest rate cuts would now be scaled back, given forecasts that the Budget could push up inflation over the next two years. <\/p>\n
“Financial markets are now not expecting rates to fall below 4% until 2026,” she said. <\/p>\n<\/div>\n<\/div>\n
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<\/picture><\/span>Getty Images<\/span><\/div>\n<\/figure>\n<\/div>\n