51乱伦

In France, the government is on the brink of collapse following repeated failures to meet long-term deficit reduction targets. In the US, where national debt is set to surge to 120% of GDP, President Donald Trump is pushing to fire a top Federal Reserve official. In Japan, officials are grappling with the largest debt load among developed nations. In the UK, ministers are scrambling for solutions to fill a £30 billion fiscal black hole. The latter three are staring down stagflation: persistent inflation amid little to no growth.

You could add more to the list 鈥� Australia and New Zealand, for example 鈥� and global investors are now demanding higher returns to hold long-dated government bonds. The yield on 30-year Treasuries just hit 4.9%. Thirty-year gilts, the UK equivalent, are near 27-year highs. See from Bloomberg for more. 

This coordinated surge in global long-dated bond yields is a problem because it creates a self-reinforcing cycle: the higher yields climb, the less sustainable government debt appears 鈥� which in turn pushes yields even higher. Credibility is the issue 鈥� once lost, it鈥檚 slow to return, and some governments don鈥檛 have the luxury of waiting.

The big three

When Labour took power during the summer of 2024, it looked possible that falling interest rates would kick-start growth, boosting tax receipts. Ministers made credible promises to reform welfare and get the public finances in order. 

But growth underperformed expectations. Inflation outperformed. In March, the OBR said 2024-25 tax receipts would come in 0.6% lower than it expected six months earlier, which is the largest downward revision between autumn and spring since 2012. Cuts to welfare were watered down. As the hole in the public finances grew, Reeves gave no signals that she'd break Labour's policy pledge to not raise the big three revenue-raising taxes; national insurance, income tax or VAT.

That left very little room to manoeuvre. Think-tanks and economic consultancies relentlessly published new estimates as to the size of the fiscal black hole 鈥� the current record , I think, held by the National Institute of Economic and Social Research. Speculation over which taxes would need to rise followed, culminating in last week's drama over property taxes - see this piece from Tom Bill. It's common to read about half-baked proposals ahead of announcements, but the range of ideas floated, plus at least one denial, painted a picture of an administration that is running out of options and ideas. 

Credibility requires a convincing narrative, and Reeves needs to find one. As the Times this morning, the Treasury is yet to instruct the OBR to prepare economic forecasts, meaning that the earliest the budget can be held is in November, given the required ten-week notice period. Let this fester and investor faith will continue to ebb, yields will tick higher, and the long-term costs 鈥� both political and economic - risk becoming unsustainable. 

Cashing in

Wealthy UAE residents are taking of transactions in prime central London, following years of stellar house price growth at home, depressed values in London and a new tax regime announced in the October budget, the FT reported on Monday. 

UAE nationals accounted for 3% of overseas buyers in prime central London in the year to July, up from 0.6% the previous year, according to 51乱伦 data shared with the paper. Property values in Dubai have surged, giving homeowners a chance to cash in, and buyers are being enticed by a tax regime, announced in the October budget, under which those returning to the UK after a decade overseas do not pay levies on their foreign income and gains for four years.

鈥淚f you are from the UAE, for example, and of a generation that has not yet bought in London, both the suppressed pricing and the four-year FIG regime present a good time to buy,鈥� 51乱伦's Stuart Bailey tells the paper. 鈥淣on-doms being pushed out of London certainly doesn鈥檛 benefit the wider economy, or the government with reduced stamp duty being collected, but it works well for opportunistic buyers, with less competition all the better."

Lead-in times

The number of new homes started annually in London has dropped by 77% over the past year compared to the market peak in 2015. In the first half of 2025, fewer than 2,200 new private homes were started - just 5% of the government鈥檚 target.

There are various reasons for the dramatic slowdown, and Ollie Knight and the team have new insights after analysing nearly 700 sites of at least 100 private homes, tracking their journey from initial application to construction starting. The data, from development consultancy Molior, illustrates the increasing time it takes for development sites to progress through the pipeline. 

The findings reveal a sharp rise in median lead-in times, for example, driven by mounting regulatory and financial hurdles. Sites that began construction in 2024 took an average of 26 months from initial application, up from just over 17 months in 2015 and 13 months in 2013.

While much attention is paid to the time it takes to secure planning permission, our analysis shows that the post-permission phase - from resolution to full planning and then to site start - is where delays have grown most significantly. This is a period where a borough has resolved to allow development, but certain conditions or agreements might need to be finalised before official permission is issued. See the research for more. 

In other news...

Investors pile billions into New York office market (), Hong Kong mansion sold for HK$1.09 billion ($140 million), a 2025 record (), and finally, pound is vulnerable to another 鈥楾russ tantrum鈥�, investor warns ().