The right thing about the back of tax

The top rate tax rabbit had been returned to the hat on Monday morning, according to others.

The markets didn't respond during the speech because there was nothing to respond to. The effective borrowing costs of government were down and sterling went up on the day.

It is hard to conclude that the speech, and others at the conference, have been edited to remove anything that could reignite market jitters.

It seems like it's reasonable given the circumstances. It is often forgotten that Theresa May's speech at the same venue in 2016 made sterling fall. There were significant announcements before and after the main show on the conference floor. The markets can't wait for seven weeks for hard numbers - that is the reality that Number 11 has come round to after pressure from the Chair of the Treasury Select Committee. Plan B is slowly taking shape.

It shows that the government is prepared to do what it takes to regain market confidence. If there was any doubt in the need for that, mortgage broker Paul Butlin - whose office is a 10 minute walk from the conference centre - could set it straight.

NatWest had just returned to the mortgage market, and repricing five-year fixes were 1.5 percentage points higher than a week ago, he told me. As I left, the interest rate on a landlord mortgage had doubled to over 7%, well above a commercial return.

Big name firms are facing over 10% borrowing costs because of it, and it affects business lending too. Many people can't raise money at that rate and will have to turn to shareholders. The market turmoil that took place last week is now fully filtering into the economy.

The experience of the top rate of tax U-turn shows that MPs will weigh in favour of tax reforms that benefit the wealthy while Downing Street will say that new OBR forecasts necessitate changes of this order.

After all, the popularity of a fiscal measure matters. Consideration of the impact of such changes on the poor and the rich is also a factor. The impact on growth will have to be weighed against the impact on macroeconomic stability.