Blain’s Morning Porridge April 22nd, 2026 – Gilts Wobble as Much as Starmer…
“All political lives end in failure…..”
The spike in Gilt Yields says it all. Its crisis – again – in Westminster as Starmer is mired in crisis with no obvious way out. Yet again we learn a political lesson – good political leaders are a scarce commodity. The British electorate is losing faith in politics. What will global investors think?
Last Friday I was chatting to a risk officer at a US hedge fund, and he was wondering why the UK Bond market is not in more trouble? With the 10-year gilt spiking nearly 50 bp higher in just a few days – 5.14% this morning (according to MarketWatch, but others were lower) – what’s the definition of trouble?
How much worse might it get as the government teeters on the edge of a precipice and steps forward….? Just last week I was writing how Labour could raise bond funding to finance defence and other critical crises points. Now there is talk of scaling back bond sales in the face of rising “political risk”.
Oh dear… things as so dire I might have to stop and have a nice strong cup of tea.
Its only 3 weeks till local elections will deliver a hammer blow to the current government. It’s not even about unpopularity or failure. The bottom line is British voters are bored, disillusioned and disappointed by politics. They want their country fixed. They want to be led out of despair and back to growth, health, wealth and prosperity, with better jobs and accommodation security. What they see when they look at Westminster is petty games and dither. What they want is leadership – and it’s just not there.
The problems at the heart of the UK economy in terms of poorly envisaged and badly executed policy, under-resourced and ineffective bureaucracy, and economic illiteracy – the core messages of my new book, The Battle For Hamble – will remain unaddressed as long as the dither continues, leaving the UK fundamentally broken.
There is little on the horizon, which raises the risk we keep clutching at straws… hoping something better arrives. (Hope is never a strategy.)
I have to admit I was impressed when Sir Keir Starmer appointed Lord Mandelson as Ambassador to Washington. Brilliant. It seemed an act of political genius – send the UK’s finest exponent of political skullduggery, the nation’s most conflicted and ethically dubious political-insider to deal with the mercurial and equally morally-void Trump.
Mandelson should have been perfect for the role as Trump-Whisperer. He was in the top rank of obsequious and conniving UK politicians, a financially compromised floater in the pond life of British Politics. He would have appealed to Trump’s love of fawning flattery – a senior Labour Lord being sent to appease him. Apparently, they worked very well together. Trump now denies knowing Mandelson – the one thing Trump fears more than anything is any connection to Epstein being exposed.
Today the British political establishment is full of “outraged fury” at the appointment. Yet again, as it so often does, the classic quote for Casablanca will suffice: “I am shocked, shocked to discover that gambling is going on in here”, followed by a waiter: “your winnings, sir”, to which Inspector Renault responds “oh, thank you very much”.
Who would Kemi Badenough have sent? Michael Gove? Boris? Farage? British politics is all a political game – but there are always consequences.
No one really cares about Mandelson’s previous form and multiple resignations from political office – the undisclosed loans from businessmen seeking favour, the dodgy dealing around funding the Millenium Dome to disguise the costs, the eyebrows over documents for his partner, or his multiple connections to Russian Oligarchs while he was a European trade commissioner.
But today, he was guilty of the crime du jour – a proven link to Epstein, and evidence that his financial ties to the paedophile financier had compromised him into sharing confidential information. In the USA, that would probably not be an issue. He could make some grovelling apology, say he was unaware of the sordid happenings on Epstein Island, and play his “I’m gay” card. Here in the UK…. justice matters.
Mandelson’s appointment looks likely to be the straw that’s broken Starmer’s back. Like so much that Starmer has done, an apparent good decision has blown up in his face because he missed something obvious and wasn’t opening to listening to those around him.
Starmer has proved a disaster as Prime Minister. He has failed to lead. He may be a brilliant and dedicated lawyer, but he’s allowed himself and his cabinet to become trapped in analysis paralysis, trapped in the headlights of mounting issues, but failing to launch any meaningful policy shifts to put the UK back on track. Whether it is dealing with Defence where spending plans have been delayed, solving the housing crisis, opening up energy, moving closer to Europe to reverse Brexit frictions, or putting plans in motion to reform and rejig the NHS before its ravening appetite for funding consumes us all…. Labour is failing to deliver. Anything.
The smaller a nation or entity is the more dangerous politics becomes. The UK is an increasingly small nation.
Let me tell a story:
A few years ago, a modestly successful small businessman retired and took up sailing. He bought himself a boat and joined the Yacht Club. He found himself on a committee and threw himself into it, writing minutes, looking at contracts and opining on the colour of the carpets. He climbed the greasy pole of the club’s structures to become, much to everyone’s surprise, Commodore of the club. It went to rack-shit at speed. He remained a small businessman. He couldn’t delegate and did not listen. He ignored the members and committees. He insisted only he could make decisions – which he did without reference, discussion and very slowly. He wound people up. He got angry and upset people because they saw how ineffective he was. The club nearly sank before he was eased out. Today, the same club is back on track and thriving.
Can the same thing happen for the UK? Perhaps the only thing keeping Starmer in office is fear of what might follow.
Angela Rayner would be the front runner, even though she was mired in tax irregularities. She would be the candidate for the left-leaning majority of the party and could swing Labour towards the disaffected young voters who are now voting Green. The fear would be increased welfare spending, rising taxation on the middle classes, and a focus on worker-rights legislation – all of which are problems for boosting the growth the UK needs.
Wes Streeting talks a modest talk. He’s Starmer Mark 2. A slightly stronger communicator but about as motivating as a cold sausage roll.
Ed Miliband already failed his audition to lead the country. He’s a political thinker but a poor communicator. His support for green policies and the environment is not unpopular, but he’s sunk by his slowness and wonkiness.
What Labour and the nation needs is someone with a mix of populist charisma, a grasp of policy and political chops to actually do stuff… Who? Andy Burnham is Mayor of Manchester (making him unelectable in certain swathes of North London) – but being distant from Westminster could be an electoral boost. But because he’s not an MP, he’s not in position to jump in a rescue and redirect this flolloping government.
Meanwhile… I’ve got Gilt yields overlaying my current market threat board.
No Morning Porridge the next few days – am travelling!
Out of time and back to the day job…
Bill Blain
Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital
Please don’t forget about my new book, The Battle For Hamble. It’s a proper grown-up examination of how bureaucracy has failed: a tale of Greedy Corporates, Bad Planning and Economic Illiteracy. It explains how a wholly unnecessary Gravel Quarry will be dug in middle of a prosperous village – putting 6000 jobs at risk. The truth is no one wants gravel, and the quarry company understands it’s not what you dig out, but what you stuff back into a hole in the ground that matters. Gravel sells for £30 a tonne – Landfill earns £150 a tonne to bury. Go figure.
One Comment
Comments are closed.
One or two small edits: What they (US citizens) see when they look at Westminster (Washington DC) is petty games and dither. What they want is leadership (and they mistook that for DJT) – and it’s just not there.