The City was not surprised to learn that an Australian former minister has launched an inquiry into the Aukus pact, but the timing is exquisitely awkward. The UK’s multibillion-pound submarine programme, already labouring under a fog of cost overruns and delay, is about to be exposed to the unflinching light of a formal inquiry. One might say the Australian ex-minister has decided to check the engine before buying the car.
The Bottom Line: the market was already pricing in a high probability of further budget blowouts. This inquiry merely gives the gilt market another reason to twitch nervously. The Treasury, meanwhile, will be watching with a stiff upper lip and a calculator, wondering how many schools could have been built for the cost of a single nuclear submarine.
