Which version of events do you believe? Sir Keir Starmer and Rachel Reeves have ditched their manifesto-busting plan to increase income tax rates. Was this because of better economic forecasts or because they’re in hock to mutinous Labour MPs?

The distinction certainly matters to the bond markets, which punished the Government on Friday morning by increasing borrowing costs. Investors questioned how the pair could make up for the revenue shortfall and concluded that they enjoy little credibility because they’re unable to take tough economic decisions.

Reeves had effectively drawn up two Budgets. The first included the controversial income tax rise. The second includes changes to the tax code, among other smaller measures.

Arguments in Cabinet and pushback from MPs about the political co

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