---
title: "Farage’s policies would crash the pound, ex-BOE official warns"
description: "The tax and spending plans of Reform UK would crash the pound and drive up borrowing costs, according to a former Bank of England policy maker who predicted the disastrous fallout from Liz Truss’s mini-budget."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-06-21-farages-policies-would-crash-the-pound-ex-boe-official-warns/"
published: "2024-06-21T18:05:32"
lang: "en-ZA"
word_count: 338
---

# Farage’s policies would crash the pound, ex-BOE official warns

> The tax and spending plans of Reform UK would crash the pound and drive up borrowing costs, according to a former Bank of England policy maker who predicted the disastrous fallout from Liz Truss’s mini-budget.

By Bloomberg · Published 21 June 2024, 20:05 SAST

## Content

Martin Weale, who’s now professor of economics at King’s College London, said mortgage costs would soar if leader Nigel Farage wins the election on July 4 or succeeds in getting his plans adopted by the next government. He likened the impact to the market turmoil after Truss’s unfunded tax cuts in September 2022.

Nigel Farage during a campaign event in Clacton-on-Sea.

“The market would demand a moron premium and mortgages would likely go up again,” Weale said in an interview. “This would be an event similar to the Liz Truss event.”

Farage’s plans include £90-billion of tax cuts and £50-billion more spending a year, paid for by slashing benefits, ending public sector “waste” and making vast savings on the Bank of England’s quantitative easing programme.

The Institute for Fiscal Studies, a think tank, said the [numbers](https://ifs.org.uk/articles/reform-uk-manifesto-reaction) in the party’s manifesto “do not add up”.

Weale’s warnings carry weight because he correctly predicted that Truss’s tax-cutting mini budget would “end in tears” with a “run on the pound” and higher interest rates.

He made that call a day before the “Growth Plan” was unveiled in September 2022. In the aftermath of the government announcement, sterling crashed to a record low, borrowing costs spiked and the BOE had to intervene to prevent a financial crisis. Truss quit as prime minister a month later.

“Markets overlook a lot,” Weale said, but added that he believes Reform’s plans would still trigger a sharp reaction. “Tax cuts don’t solve problems with the supply side of the economy. Sterling would depreciate, long-term interest rates would rise.”

Farage claims Reform could overhaul the Conservatives to become the real opposition in next month’s election. Polls put it [just a few points behind](https://www.bloomberg.com/news/articles/2024-06-21/bloomberg-uk-poll-of-polls-labour-dips-as-reform-marches-on) the Tories on vote share but the UK’s first-past-the-post system means it is unlikely to win many seats.

Farage previously led the UK Independence Party and the Brexit Party. While he was a key figure in the UK’s withdrawal from the European Union, he’s failed to deliver electoral success in terms of parliament seats.