No independent sovereign stress-testing or fiscal-crisis contingency capability
The OBR identifies fiscal risks, projecting debt at 274 per cent of GDP by 2071 on its 2025 baseline, and is statutorily barred from recommending policy; it publishes no crisis playbooks. Treasury and Bank contingency planning is internal and unpublished, and the 2022 LDI episode showed it can be caught out. IFS, NIESR, the Resolution Foundation and the Lords Economic Affairs Committee produce commentary and inquiries. Nobody runs the sovereign equivalent of a bank stress test: publicly war-gamed scenarios covering a gilt buyers' strike, a failed auction, a ratings cascade, or an inflation shock hitting the roughly 25 per cent index-linked stock, with pre-agreed response options. Goldman Sachs and other private analysts fill some of the space, with obvious conflicts.
The UK borrows around £300bn gross a year into a market where term premia run at double historic norms and the marginal buyer is a leveraged hedge fund. Crisis options are best designed before the crisis. The 2022 experience showed improvisation costs billions, and it nearly broke the pension system.
A standing, independent fiscal-crisis simulation programme publishing periodic sovereign stress scenarios with response playbooks, run by a consortium of former officials and institutes or a purpose-built unit. Foundations could fund it at £1-3m a year as a natural extension of an existing institute.
// Build now: First artefact: published sovereign stress scenario with response playbook, run by institute consortium; foundation-fundable at £1-3m/year.
Nobody publicly war-games a gilt crisis after 2022 nearly broke pensions, the watchdog is barred from advising, and a buildable programme sits wholly unfunded.
claims & evidence · 6
// each factual claim in this entry, its source, and when it was last checked. Unresolved attributions are flagged rather than hidden. Challenge any of them on the thread below.
- 63.1verifiedchecked 2026-07-07The OBR's 2025 Fiscal Risks and Sustainability report projects public debt at 274 per cent of GDP by the early 2070s on its baseline.
- 63.2verifiedchecked 2026-10-08The OBR is statutorily barred from recommending policy.Section 5(3)(b): the OBR may not consider what the effect of any alternative policies would be.
- 63.3estimatechecked 2026-07-07The UK borrows around £300bn gross a year, and roughly a quarter of the gilt stock is index-linked.Both figures track the DMO's published remit and portfolio statistics; add the DMO remit page as the primary source.
- 63.4verifiedchecked 2026-10-08The 2022 LDI episode caught official contingency planning out and nearly broke the pension system, at a cost of billions.The Bank's own case study of the 2022 intervention; the IMF's LDI lessons papers corroborate.
- 63.5verifiedchecked 2026-07-07No public body or institute runs publicly war-gamed sovereign stress scenarios with pre-agreed response playbooks.Absence claim. Checked against OBR publications (risk identification only, no playbooks), the Lords Economic Affairs Committee inquiry, and the public output of IFS, NIESR and the Resolution Foundation.
- 63.6reportedchecked 2026-07-07Term premia run at roughly double historic norms and the marginal gilt buyer is a leveraged hedge fund.Academic and sell-side analysis; the Goldman Sachs piece is a conflicted source the entry itself names as such.