14th May 2026
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.
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