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Kwasi Kwarteng: Labour ‘at risk’ without more tax rises amid bond jitters

The government risks being plunged into crisis unless it prepares for another bruising round of tax hikes to cover sharp rises in energy subsidies, former chancellor Kwasi Kwarteng has warned. In an interview with City AM, Kwarteng said taxes could be put up as soon as November if the government pushes ahead with proposals for [...]

Mar 09, 2026 &03050909202631; 17:05 UTC www.cityam.com Trending 4/5

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Negative for markets

Sentiment score: -65/100

Moderate impact Short-term (days)

WHAT THIS MEANS

Former UK Chancellor Kwasi Kwarteng warns that the Labour government faces potential crisis without additional tax increases to cover rising energy subsidies, with possible tax hikes as early as November. This commentary reflects concerns about fiscal sustainability and government bond market stability amid elevated energy costs.

AI CONFIDENCE

75% High

SENTIMENT GAUGE

NEWS POWER SCORE

AFFECTED ASSETS

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British Pound / US Dollar

GBPUSDCurrency

Expected to decline

Tax increase warnings and fiscal concerns typically weaken sterling as they signal economic headwinds and reduced consumer spending

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FTSE 100 (London)

^FTSEIndex

Expected to decline

UK equity index pressured by potential tax hikes reducing corporate profitability and consumer discretionary spending

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10-Year Treasury Yield

^TNXBond

Expected to rise

UK gilt yields may rise due to fiscal concerns and potential credit risk reassessment

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EU→.PA

EU→.PAStock

High volatility expected

European equities face spillover uncertainty from UK fiscal policy developments

PRICE HISTORY

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⚡ SUGGESTED ACTION

Consider reducing UK equity exposure and shorting GBP in the near term. Monitor November policy announcements closely as tax hike timing could trigger sharp sterling weakness and equity selloff. Defensive sectors and bond hedges recommended.

KEY SIGNALS

Fiscal sustainability concernsPotential tax increase announcement riskEnergy subsidy cost pressuresBond market volatility indicatorsGovernment credibility concerns

SECTORS INVOLVED

EnergyUtilitiesConsumer DiscretionaryFinancials

Analysis generated on Mar 10, 2026 at 01:01 UTC

Disclaimer: This analysis is generated by artificial intelligence for informational purposes only and does not constitute financial advice, investment recommendation, or solicitation. Original reporting by City AM. Always conduct your own research and consult a qualified financial advisor before making investment decisions.

Kwasi Kwarteng: Labour ‘at risk’ without more tax rises amid bond jitters

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