Gilts meltdown: Has Reeves learned nothing from Truss mini Budget fiasco?
Gilts, bonds and the pound are reacting with force as investors confront a Budget process that looks increasingly unstable, warns the CEO of one of the world’s largest independent financial advisory organisations.
The market’s verdict carries a familiar edge, drawing direct comparisons with the turbulence that engulfed the UK during the Truss ‘mini Budget’ crisis.
The selling pressure accelerated this morning, with 10-year gilt yields moving sharply higher toward 4.54% and sterling slipping to around $1.312. Longer-dated bonds are also under strain, and the pound has reached fresh two-year lows against the euro.
These moves follow reports that the chancellor is now reconsidering her plan to raise headline income-tax rates, alongside doubts over an exit tax and other revenue measures needed to bridge a fiscal gap estimated at up to £35bn.
Nigel Green, CEO of global financial advisory deVere Group, says: “This is exactly how credibility shocks begin.
“Gilts are sliding, borrowing costs are climbing, and sterling is weakening because markets fear the government is improvising. There’s nothing investors hate more than indecision disguised as strategy.”
He continues: “The reaction is unmistakable. Bond traders are telling the Treasury that they will not tolerate mixed signals. They saw what happened during the Truss turmoil and they’ll not wait politely for clarity. They’re pricing risk in real time.”
Behind the volatility lies a growing sense that the UK is replaying the early stages of a crisis the country should have learned from.
The chancellor is reported to have drafted two separate Budgets as internal arguments intensify. With less than two weeks before the statement, the absence of a settled plan is fuelling anxiety across global markets.
The deVere CEO says: “Investors remember exactly how fast the Truss mini-budget spiralled. It took days for the gilt market to fracture under the weight of uncertainty. The Bank of England had to intervene. The memory is still fresh.
“Yet the current signals from Westminster suggest the lessons of that episode are fading.”
He adds: “The question hanging over the markets today is simple: has Rachel Reeves absorbed what the Truss period taught every policymaker?
“Credibility is not a luxury. It’s the currency that underpins everything else. Without it, even the best-intentioned plans fall apart.”
Gilts remain the most sensitive barometer of investor trust. When yields jump this quickly, it reflects more than technical movement.
It reflects concern that the UK is losing control of its fiscal narrative. The parallel with 2022 intensifies because the pattern is similar: uncertainty rises, messaging shifts, and the bond market reacts immediately.
Nigel Green warns: “Bond markets cannot be managed with wishful thinking. They respond to discipline, coherence and clarity. When those elements disappear, yields surge.
“The pattern we are seeing today aligns with the behaviour that preceded the Truss meltdown, and that should concern every saver and investor.”
Sterling’s decline adds further tension. A weaker pound amplifies inflation pressures through higher import costs, deepens the economic strain on households, and complicates the policy environment for both the Treasury and the Bank of England.
Nigel Green says: “When the pound falls alongside gilts, you’re watching international investors turn away from the UK.
“This shift raises borrowing costs across the economy and increases the risk of a deeper slowdown. Confidence in fiscal leadership is everything in this moment.”
For savers and investors, the implications are immediate. The gilt market is signalling instability at a time when the economy is already losing momentum. Households face a softening labour market, firms face higher financing costs, and the Budget remains unsettled.
Nigel Green says: “Anyone with exposure to UK assets must reassess their positioning now. The market is telling you that volatility is back. The scale of the fiscal challenge means more turbulence ahead.
“Advice is essential because the landscape is shifting and the consequences for long-term financial planning are significant.”
He concludes: “The UK cannot afford another credibility breakdown. Gilts are flashing warning signs with increasing urgency.”