Reeves has chosen treacherous times to be making such an obvious target of herself

The Chancellor has made investors nervous just when they were expecting an economic plan

It was meant to be the most consequential Budget in a generation; an economic plan for the future that would deliver the strongest rate of growth in the G7.
In the end, the only praise came from the Chancellor’s friends in Washington at the International Monetary Fund, who welcomed the Government’s “focus on boosting growth … while addressing urgent pressures on public services”.
They can’t have read the Office for Budget Responsibility’s accompanying “Economic and fiscal outlook”, or indeed the mountain of equally damning analysis from more or less everybody else who actually knows what they are talking about.
Lest it be Liz Truss’s mini-Budget, it’s hard to recall a fiscal event being as poorly received as this one, with large elements of it quite plainly not properly thought through despite the inordinate amount of time Rachel Reeves took between gaining power and delivering her plan.
No one would quarrel with the notion that the public finances are in the most ghastly mess. The extravagances of lockdown have holed them below the waterline. Whoever the occupants of Downing Street might have been, they would have struggled with such a dire legacy.
But having been dealt a bad hand, Reeves has played it poorly, setting the UK economy up for years of disappointment.
If all that extra borrowing and taxation was heading as promised into gainful investment in the future, the strictures would not have been so bad.
However, much of it goes straight into current spending, and in particular the bottomless pit of the National Health Service, a political deity that must be constantly served and sated for seemingly ever-diminishing returns in terms of health outcomes.
People were expecting more of a medium-term plan from Reeves’s first Budget, with the extra borrowing and taxation spread out over the course of the parliament for spending on the sort of physical infrastructure that would materially enhance the economy’s growth potential.
But what we got instead, and what’s increasingly alarming bond markets, is a giant, front-end loaded splurge of spending on simply patching things up, with little or nothing left in the fiscal cannon to further support growth once the initial sugar rush has passed.
Nowhere is this more obvious than in health and social care, where day-to-day spending is expanded by £12bn this financial year and then a further £10.4bn the year after.
The lion’s share of these increases go straight into pay, as it has done on every other occasion before when the presiding government has opened the spigots of health spending.
The last such occasion was 2002, which saw an even bigger increase in spending on the NHS than this time around. Doctors couldn’t believe their luck; many of them ended up with substantially higher pay for significantly less work.
Back then, the surge in resources was at least accompanied by a major report on healthcare reform, based on a review of the future of the NHS by a former National Westminster Bank chief executive, Derek Wanless.
Not much of it ever came to fruition, and what did survive the NHS’s myriad vested interests did little or no good. But we’ve not yet even seen a plan this time around.
Wes Streeting, the Health Secretary, talks a good game, but where’s the beef? All he’s done so far is set out a fluffy series of objectives and sought a “national conversation” on reform.
The history of granting the NHS big increases in funding before deciding how the money should be spent is not encouraging.
Some kind of argument can be made, I suppose, that merely reducing the backlog of waiting times improves the economy’s supply, with more people released into the workforce. But it’s a slender argument on which to bet the farm.
Healthcare is a leviathan where ageing demographics combine mercilessly with rising expectations to create insatiable demand which a taxpayer-funded service can never hope to meet.
It doesn’t matter how much money the Government throws at “our precious” NHS, the sense of perma-crisis requiring ever more money to be thrown at it will never go away.
But it is not just the unresolved challenges of British healthcare that bond investors worry about.
The wider concern is just how little the extra £70bn a year in tax and borrowing actually buys.
By the year after next, it is all largely used up, leaving the spending profile for the rest of the parliament exceptionally tight. This looks politically unrealistic, to put it mildly.
Some of the more immediate spending plans seem equally implausible. For instance, does anyone honestly believe there will be no increase at all in defence spending next year? That’s the Treasury’s working assumption.
Likewise, the Home Office, where steep cuts in departmental spending are assumed, predicated on the delusional belief that the Government is going to miraculously solve the small boats problem.
The idea that after the initial spree, the Government will be able to limit the overall spending envelope to an increase of just 1.3pc a year as planned is for the birds.
“I’m afraid this looks like the same silly games playing as we got used to with the last lot,” says Paul Johnson, director of the Institute for Fiscal Studies. “Pencil in implausibly low-spending increases for the future in order to make the fiscal arithmetic balance.”
The obvious implication is that there is a further round of tax and borrowing increases yet to come. Small wonder that bond and currency markets are getting jittery. Where does all this stop?
As it is, massive uncertainties surround the Government’s ability to raise the sums it hopes for from the tax increases it has so far announced.
For instance, the OBR reckons that the estimated £26bn a year assumed from the increase in employers’ National Insurance contributions is reduced by around £10bn once public sector rebates and behavioural consequences such as reduced payroll employment and greater use of the self-employed is taken into account.
Similarly with the various measures to tax assets and wealth, where the yield could be reduced by as much as a quarter by evasive action.
As for the billions of pounds the Government hopes to raise by recruiting an additional 5,000 tax inspectors to root out evasion and avoidance, don’t hold your breath. Every year, the Government pencils in huge gains in revenue from enhanced compliance. If all of them had been met, they’d have paid for the NHS several times over.
Bond investors are right to be nervous. The Debt Management Office plans to tap them for £300bn this year on top of the £100bn of gilts the Bank of England is selling as part of its “quantitative tightening” programme.
That’s an awful lot of gilts to sell at a time when global markets are being flooded with competing advanced economy debt. There is no shortage of alternatives for investors to choose from.
For Reeves, these are treacherous times to be making such an obvious target of herself.