The Prime Minister cannot satisfy all three key audiences: the markets, the party, and the public, says Helen Thomas

Every Prime Minister faces a moment when economic reality collides with political promise. For Keir Starmer, Budget day could be that moment of reckoning. He promised calm after chaos: that the grown-ups were back in charge, that the markets would relax and that Labour would govern with competence and credibility. Instead, he is confronting a fiscal black hole that can’t be filled without breaking manifesto pledges or splitting his party. What was meant to be a stabilising statement of fiscal intent may instead become the detonator for a leadership crisis inside Labour.

Rachel Reeves’ fiscal rules, to put debt onto a declining path and limit borrowing for day-to-day spending, are, as we surely never tire of hearing, “non-negotiable”. This was supposed to embed stability into the heart of government. Instead, they have become a straitjacket, causing instability within the Labour Party itself. The government’s hands are tied and every policy choice now has amplified political consequences.

Labour’s internal coalition is far from settled. The party’s left flank, energised by years in opposition, now expects delivery on the rhetoric of fairness: wealth taxes, rent reform and expanded public services. The centre, meanwhile, wants fiscal prudence and a Mandelsonian........

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