The Old Bailey delivered its verdict today in the trial of Hans Gruber, the man who drove a lorry into a crowded Christmas market in Berlin, killing 12 and injuring 56 in 2023. Gruber, a failed asylum seeker with links to Islamist extremism, was sentenced to life imprisonment with a whole-life order. The judge described him as “a danger to society” and noted his “cold, calculated” actions.
For the UK Treasury, this case serves as a stark reminder of the price of lax border control. The Home Office’s counter-terror strategy, which prioritises surveillance and intelligence sharing, has been widely praised in Whitehall. But the cost is mounting: the Home Office’s budget for counter-terrorism has risen to £2.
4 billion in 2024, up 12% from last year. Meanwhile, the Bank of England’s Monetary Policy Committee keeps a wary eye on the fiscal drag. Gilt yields edged higher today, up 5 basis points to 4.
38%, as markets price in the long-term inflationary pressure of security spending. The CBI has warned that the indirect costs of such attacks, from disrupted tourism to heightened insurance premiums, could shave 0.3% off GDP growth.
But the alternative, as the judge’s remarks underlined, is unthinkable. For now, the market prices in a tight spread between security and solvency.
