Reform UK’s Plans Could Trigger Run on the Pound

Reform UK’s economic plans have been met with sharp criticism from financial experts, who warn that their proposals could lead to a loss of confidence in the UK economy and potentially trigger a run on the pound. The party’s manifesto includes £141 billion in spending commitments, but the financial strategy relies heavily on £156 billion in anticipated savings and overly optimistic growth projections. The Institute for Fiscal Studies (IFS) has labeled these assumptions as “extremely optimistic,” raising concerns that the numbers do not add up and that the proposed policies could destabilize the economy.

Critics argue that Reform UK’s proposed tax cuts and spending increases, such as raising the income tax threshold to £20,000 and abolishing stamp duty, lack credible financial backing. The IFS suggests that these policies would likely require severe cuts to public services, which could result in significant social and economic consequences. The risk is that these fiscal measures could backfire, leading to public dissatisfaction and further economic strain.

The potential economic instability caused by Reform UK’s proposals has drawn comparisons to the 2022 minibudget under former Prime Minister Liz Truss, which caused a sharp decline in the pound’s value and triggered higher borrowing costs. Economists warn that implementing similar plans could lead to a loss of investor confidence, destabilizing the UK’s financial markets and further eroding the value of the pound. This has raised alarms about the long-term impact of Reform UK’s economic approach on the UK’s financial health.