Margaret Thatcher famously told the Commons in 1988 that ‘there is no way in which one can buck the market’. She meant that it would have been pointless to deploy policy tools to try to quell the pound’s then strength against the deutschmark, but she has never been proved wrong in a broader sense. One cannot even tell the market what to think, someone might have added for the benefit of US Treasury Secretary Scott Bessent, before he said that yields on American government bonds ‘don’t reflect the underlying fundamentals’.

What yields reflect is what markets collectively think about fundamentals – and what traders do next impacts every aspect of economic life. Global bond investors currently think the Trump regime is borrowing excessively to spend beyond its means, not least on the conflict with Iran. Washington’s total debt has passed the unimaginable milepost of $40 trillion for the first time, while its fiscal deficit heads towards 6 per cent of GDP against a 50-year average of 3.8 per cent. American companies are also piling on debt to fund huge investment in AI, making them ultra-sensitive to the higher interest rates which reflect rising bond yields.

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All a bit technical and all very American, you’re thinking: but let me explain why it’s also a threat to you and me. Those global investors have been selling US Treasury bonds, pushing........

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