No independent sovereign stress-testing or fiscal-crisis contingency capability

The OBR identifies fiscal risks (its 2025 report projects debt at 274% of GDP by 2071 baseline) but is statutorily barred from recommending policy and publishes no crisis playbooks. Treasury and Bank contingency planning is internal, unpublished and, as the 2022 LDI episode showed, can be caught out. IFS, NIESR, the Resolution Foundation and the Lords Economic Affairs Committee produce commentary and inquiries, but nobody runs the sovereign equivalent of a bank stress test: publicly war-gamed scenarios (gilt buyers' strike, failed auction, ratings cascade, inflation shock hitting the ~25% index-linked stock) with pre-agreed response options. Goldman Sachs and other private analysts fill some of this space, with obvious conflicts.

The UK borrows ~£300bn gross a year into a market where term premia are double historic norms and the marginal buyer is a leveraged hedge fund. Crisis options are best designed before a crisis; the 2022 experience showed improvisation costs billions and nearly broke the pension system.

A standing, independent fiscal-crisis simulation programme: periodic published 'sovereign stress scenarios' with response playbooks, run by a consortium of ex-officials and institutes (IFS/NIESR model) or a purpose-built unit. Foundation-fundable at £1-3m/year; 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.

No one publicly war-games a gilt crisis after 2022 nearly broke pensions; the watchdog is barred from advising and a buildable programme is cheap but wholly unfunded.