Uploaded May 2026 | Updated September 2026, 3 weeks ago
UK government borrowing costs are rising fast, and the official explanation does not make sense. Britain is paying far more to borrow than France or Italy, despite having its own currency, a central bank, and no meaningful risk of default.
So what is really going on?
In this video, I argue that the City of London is using the bond market to discipline government and protect wealth. The institutions that own most UK government debt are banks, pension funds, insurance companies, and wealthy investors. Rising interest rates mean rising income for them.
I explain who actually owns UK government debt, who receives the £111 billion a year in interest payments, and why most ordinary households see almost none of that money.
I also look at the role of the Bank of England, quantitative easing, central bank reserve accounts, and why UK rates are so much higher than those in much of Europe.
Most importantly, I explain why the government does not need to accept this situation. There are alternatives. A government that understood how money and central banking really work could take back control of interest rates and stop this ongoing transfer of wealth to the financial sector.
If you want to understand how bond markets really work, and why UK economic policy seems designed to protect wealth before people, this video is for you.
Take a look at our poll below: youtube.com/post/Ugkxhq9jTJ6zFNJH512Xjz9cYJ-ok0XIkqT0
00:00 — Introduction: why UK borrowing costs are rising sharply
01:20 — Comparing UK borrowing costs with France and Italy
02:40 — Why official GDP and debt figures are misleading
04:30 — Who actually owns UK government debt?
06:15 — Overseas investors and confidence in the UK economy
07:40 — The role of the Bank of England and commercial banks
09:15 — Pension funds, insurance companies, and dependence on gilts
10:40 — How interest payments transfer wealth to the richest households
12:20 — Bond markets, “bond vigilantes,” and pressure on governments
14:00 — Why the City of London benefits from high interest rates
15:30 — Taking back control of interest rates and Bank of England policy
17:10 — Cutting reserve account interest and challenging City power
18:20 — Conclusion: government power, poverty, and the politics of debt
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life #BankOfEngland #InterestRates #CityOfLondon #UKNationalDebt #UKEconomy #FiscalPolicy #WealthTransfer #Neoliberalism #UKBorrowingCosts #BondMarket #RichardMurphy #FundingTheFuture #GovernmentDebt #UKPolitics #QuantitativeEasing
UK government borrowing costs are rising fast, and the official explanation does not make sense. Britain is paying far more to borrow than France or Italy, despite having its own currency, a central bank, and no meaningful risk of default.
So what is really going on?
In this video, I argue that the City of London is using the bond market to discipline government and protect wealth. The institutions that own most UK government debt are banks, pension funds, insurance companies, and wealthy investors. Rising interest rates mean rising income for them.
I explain who actually owns UK government debt, who receives the £111 billion a year in interest payments, and why most ordinary households see almost none of that money.
I also look at the role of the Bank of England, quantitative easing, central bank reserve accounts, and why UK rates are so much higher than those in much of Europe.
Most importantly, I explain why the government does not need to accept this situation. There are alternatives. A government that understood how money and central banking really work could take back control of interest rates and stop this ongoing transfer of wealth to the financial sector.
If you want to understand how bond markets really work, and why UK economic policy seems designed to protect wealth before people, this video is for you.
Take a look at our poll below: youtube.com/post/Ugkxhq9jTJ6zFNJH512Xjz9cYJ-ok0XIkqT0
00:00 — Introduction: why UK borrowing costs are rising sharply
01:20 — Comparing UK borrowing costs with France and Italy
02:40 — Why official GDP and debt figures are misleading
04:30 — Who actually owns UK government debt?
06:15 — Overseas investors and confidence in the UK economy
07:40 — The role of the Bank of England and commercial banks
09:15 — Pension funds, insurance companies, and dependence on gilts
10:40 — How interest payments transfer wealth to the richest households
12:20 — Bond markets, “bond vigilantes,” and pressure on governments
14:00 — Why the City of London benefits from high interest rates
15:30 — Taking back control of interest rates and Bank of England policy
17:10 — Cutting reserve account interest and challenging City power
18:20 — Conclusion: government power, poverty, and the politics of debt
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life #BankOfEngland #InterestRates #CityOfLondon #UKNationalDebt #UKEconomy #FiscalPolicy #WealthTransfer #Neoliberalism #UKBorrowingCosts #BondMarket #RichardMurphy #FundingTheFuture #GovernmentDebt #UKPolitics #QuantitativeEasing
