I don't see how this changes things.
Where does government borrowing come from? When the government borrows they borrow through market instruments such as bonds. Organisations such as pension funds invest in those bonds but they only do so on the basis of their longevity and stability, they do not care about the political aspects or the party in power.
Therefore if the government does anything that increases risk then the markets will be spooked or the cost of those bonds will increase. The markets were spooked because of the simple fact that Truss wildly and blindly promised something that she couldn't fund. It's like Blackburn trying to buy Messi, the people supplying the loans would certainly think twice about lending that money!
I understand that you're making the spend to grow argument but do you realistically think in this global climate that we can spend and then grow at a greater rate than currently? I say no, the global economy is on its arse, therefore where is UK growth going to come from?
This argument only makes sense if UK growth is less than everybody else and austerity is holding it back. It's really hard to make this argument given the UK is currently growing faster than say Germany and most other major countries in Europe.
If the economy doesn't grow and we become further indebted then what happens when COVID #2 comes along in 5 years, or war, a housing crash or something else? Considerable additional spending is therefore clearly reckless but I do agree restrained spending is needed however Labour have been in power for just 2 months, give them a chance.
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