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Are the country’s finances really so bad? There are four weeks to go before Rachel Reeves reveals her first Budget and she has warned of “difficult” decisions ahead. Sir Keir Starmer has called them “painful”. Ministers have been warned that there will be no spare money for current services, though it looks as though the budget rules will be softened to allow for more spending on infrastructure. As for taxes, those with “the broadest shoulders” – Sir Keir’s words – will have to pay more.

All this has had the effect of damping down the mood of both consumers and the business community. Consumer confidence, which had been rising until July, fell sharply after the Chancellor’s warning. Businesses still expect overall growth in the months ahead, according to the S&P purchasing manager indices, but S&P reported that: “…by far the most cited concern among UK private sector firms was fiscal policy uncertainty ahead of the Autumn Budget.”

There have also been the stories of wealthy Britons, including Pimlico Plumbers founder Charlie Mullins, leaving the country, and of Rachel Reeves changing plans to end the status of “non-doms” – generally people who were born abroad and live in the UK, but do not pay tax on their assets held abroad – to stop a potential exodus.

But perhaps the most troubling warning has come from the financial markets. The UK government now has to pay a higher rate to borrow long-term than any other G7 nation. We have for a long time had to pay more than most eurozone countries, particularly Germany, and also more than Japan. But for most of the past decade the British government has been able........

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