There's been a huge row over Labour's tax and spending plans
this week.
The Conservatives say they'll blow a £1.2tn hole
in the nation's finances, creating a tax bombshell.
Labour dismisses this as nonsense.
It says higher tax will pay for day-to-day spending
on things like more nurses and doctors,
and it will only borrow for higher capital spending.
Some £55bn a year for transport, broadband, green energy,
hospitals and schools.
That's a lot more, more than doubling current public sector
investment plans.
It's also a lot higher than the Conservatives' promise.
Labour plans would raise government investment back
to levels last seen in the 1970s.
That's over 4 per cent of national income,
raising some big questions about whether Britain
can finance its borrowing, and whether it'll be well spent.
We sought to find out how investors
and British government debt might react.
The Chancellor, Sajid Javid, says they'll run scared.
He was talking about Labour creating an economic crisis
within months.
But on the financing question, the government bond market
doesn't appear terrified.
The UK government can borrow for 10 years
at a cost of only 0.75 per cent, a little up from a month ago
but still extremely low.
We also talked to many people in the markets.
The main view was that investors would be willing to finance
Labour or the Tory plans very cheaply.
For example, Mark Dowding, chief investment officer
at BlueBay Asset Management, summed up the view saying,
there was a once in a generation opportunity
for a big fiscal expansion.
But you shouldn't think that because bond investors are
prepared to fund big spending, they think it's a good idea.
Many we spoke to thought pushing so much money out of the door
so quickly would lead to waste and bad investments.
The bond market isn't full of vigilantes at the moment,
ready to push politicians around.
They're happy to finance Labour's plans,
even if they think the proposals won't work.
And there's a simple reason why.
They believe even if the plans are nuts,
they'll still be repaid, with at least some interest.