Amid deepening debt and an onslaught by the president-elect, Labour must calm the markets, then think big economically

It’s certainly not 2008, nor even Truss 2022, but the men and women who move the financial markets are suddenly darkly pessimistic. Some of the private emails and WhatsApp messages circulating last week matched any efforts by Cassandra. The mood has turned against Britain.

It is not one single thing, but a toxic mix. There is the prospect of a long period of stagflation, the consequence, as even the markets recognise, of 14 years of epic misgovernment. The problem now is partly that Labour does not have a plausible growth story, partly that the chancellor, Rachel Reeves, is painted as having an economic tin ear that douses capitalist animal spirits, and partly because Trump’s arrival has exposed just how dependent an indebted, economically wounded Britain is on the kindness of strangers. It’s not yet a crisis – the stock market has held up – but without some skilful economic and political statecraft, and a measure of luck, it may become one.