Despite simmering political crises and looming economic risks, markets are riding a low-volatility sugar high – fuelled by central bank interventions – but the longer reality is ignored, the sharper the eventual correction, says Helen Thomas

With markets taking an early summer holiday, basking in the glow of record highs for the S&P500, it can seem as if political risks are simply pesky flies to be swatted off a delicious Pimm’s and lemonade. Who cares if the Labour Party is eating its own majority over the devilish detail of disability benefits or that it fell to the Vice-President of the US to break a tie in the Senate to pass the landmark tax cut bill? Why bother to notice that France’s Prime Minister only managed to survive a No Confidence vote thanks to the backing of Marine Le Pen’s right-wing National Rally party? Or that the President of the Federal Reserve is set to become a lame duck within a couple of months once his successor has been named? Or that the tariffs which set off recession fears are due to kick in next week after the three month pause?

None of it matters when the Vix index, the........

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