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Simon Wren-Lewis is absolutely right to point out that the latest scare story about the UK economy is nonsense – but he doesn’t go nearly far enough about the danger of a populist government.

The scare story is that the country might need to go cap-in-hand to the International Monetary Fund – and it is ridiculous because the United Kingdom cannot run out of money

It issues its own currency and can always create reserves, just as it did when global bond markets froze at the start of the Covid-19 pandemic.

Our current level of national debt is high compared with the early 2000s, but it is still far below what it was for much of the period between 1917 and 1960.

Wren-Lewis makes another important point: higher interest rates on UK government debt are not the result of reckless borrowing but of factors such as inflation coming down more slowly than in the US and Europe, uncertainty caused by global politics, and the Bank of England selling off debt from the Quantitative Easing programme.

But his most striking argument is that the real fiscal danger lies in the prospect of a populist government taking power.

Populists attack central bank independence, undermine institutions, flirt with defaulting on debt payments, and make spending promises that can only be funded by running up ever-higher deficits.

Wren-Lewis uses Donald Trump as his example, pointing out that markets are already responding nervously to Trump’s attempts to seize control of the US Federal Reserve.

This is an important warning – but it does not go far enough.

Here in the UK, the populist threat is not theoretical.

Liz Truss and Kwasi Kwarteng offered a recent warning of the damage such politics can do.

But the more enduring danger is Reform UK.

Nigel Farage’s party is currently the most popular in the country, proving that right-wing populism has real electoral traction.

This is the political reality the UK faces, and it is this threat that markets and mainstream commentators should be worrying about.

Wren-Lewis also points to another problem: the refusal of either Labour or the Conservatives to raise income tax, even though the NHS, schools, councils and every other public service are collapsing from a lack of funds.

He frames this as political cowardice.

But in reality, it is deliberate – politicians of both main parties know perfectly well that European-level public services require European-level taxes.

They refuse to admit it because the wealthy would have to pay more, and because a compliant media tells voters they can somehow enjoy Scandinavian-style health care on American-style tax rates.

So yes – Wren-Lewis is right that we should stop treating debt itself as the great fiscal threat.

The real danger comes from politics.

But where he is cautious, Vox Political must be blunt.

The UK economy has already been sabotaged once by right-wing populism, and unless the grip of the rich over our politics and media is broken, it will happen again.

The true story is not about borrowing, but about what happens when opportunists and liars are allowed to run the economy, with a compliant press helping them along.

With Reform UK now at the top of the polls, the threat is immediate, and ignoring it could cost the country dearly.

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