and tonight is jesse watters primetime aoc s wild and wacky town hall. a lot went down. and we will have all of it. dana: i want to see that. piers: irish american that cab driver who finally cashed in an iou after picking up a fellow irishman in 2013. he picked up shane daphne a student in dublin who couldn t afford the fair but did gainer he tee him two points of guinness. nine years later he paid $700 to fly to dublin in ireland onto the gaffney and son pub welcomed by gaffney and parents and two points of guinness. if you have ever had guinness in dublin, it s worth $700 to fly there just for two points. dana: do you like guinness? greg: read my book drank guinness and had an accident. i had to walk like a penguin all the way home. [laughter]
the dollar in decades, thousands of mortgage deals were taken off the market, it rattled international lenders so the bank of england had tojump into underpin debt. there were potential ramifications for every household in the country, then we saw at u on corporation tax and a high rate of income tax but there was still that volatility, so this is the chancellor saying keep calm, carry on, we will move things in the more fiscally responsible direction today but there are still questions about that volatility. what markets need is a certainty, we have a prime minister who might not see out the week and a gaping hole in public finances, estimates around £40 billion, inflation is high and its possible recession will be confirmed later in the year. if you were a global investor would you look at the uk as somewhere to put your iou?
it is worth putting it in context, the chancellor is on his way back from america, he has brought short a visit to new york because there are also a lot of talks going on about what will go on next. the backdrop being the bank of england support. yes, that comes to an end today. an enormously corrugated topic which has had a lot of us scratching our heads. complicated topic. three weeks ago today, the chancellor announced his mini budget which promised huge tax cuts but contained no detail on how they would be funded. the markets reacted badly. and the bank of england stepped in to start buying government bonds, which are also known as gilts, but that stops at the end of today. and the market reaction will be crucial to what happens next. so we thought we d run through some of the technical terms you might be hearing in the next few days. first of all, what are gilts? they re basically an iou from the government.
so what does this mean in the real world? ben is here to explain. we hear all of the talk of stocks and gilts and bonds, but is the impact for us? it gilts and bonds, but is the impact for us? u, gilts and bonds, but is the impact for us? , ., ., , for us? it can be and feel really rude but investors for us? it can be and feel really rude but investors are - for us? it can be and feel really rude but investors are charging | for us? it can be and feel really - rude but investors are charging the government more to lend it money, in terms that pushes up our borrowing costs. in bonds, that is in simple terms, and are you that the government issues, it borrows money and promises to pay it back with interest. it is an iou. investors know they will get their money and they will get their interest so it is low risk. that is why a lot of pension funds hold them, you can guarantee income when people draw their pensions. but what we have seen, investors charging the government more because
money to the government, you buy a bond,it money to the government, you buy a bond, it is basically an iou. the government will pay you a certain amount of money, known as a coupon, over a set amount of time. when the bond comes due in five years, ten years, even 100 years, you will get your money back. they are held in a lot of pension funds. what we have seen since the budget speech is a sell off in government bonds, because the government is seen as being a bit less creditworthy. the problem for that is that a lot of pension funds have found that they have been forced to sell assets in order to meet calls for extra collateral on their investments, caused by the wider situation. they hold a lot of government bonds, so they are selling those, which provoked a situation where the prices of government bonds were