Liz Truss was in the news Thursday.

Apparently, it’s illegal to suggest she crashed the UK economy during her comically brief stint at No. 10. Or at least her attorneys imagine such assertions might be illegal in some contexts.

Truss’s lawyers sent a cease and desist letter to Keir Starmer demanding he stop making “false and defamatory” claims about her 49 days as premier. I was going to say her “disastrous” 49 days as premier, but that might get me a love letter from her legal team.

The memory of Truss’s tenure, defined as it was by a harrowing gilt selloff and an existential scare for the nation’s LDI complex, continues to haunt the UK government bond market, which was also in the news Thursday, when gilts traded extremely heavy for a second session (it was actually the fourth day of losses, but the situation escalated over the past 48 hours).

As the simple figure shows, UK benchmark yields accelerated this week, rising near 5% in a four-day rout that crescendoed on Thursday. The 30bps increase over just a handful of sessions pushed yields to the highest since 2008. 30-year yields in the UK were the highest since the late 1990s.

The proximate cause: Fiscal fretting, and specifically Starmer’s Labour government, which finds itself staring down a crisis just six months after handing the Tories their worst electoral trouncing in 200 years.

Markets are concerned about debt and deficits, and those concerns are feeding on themselves, as higher yields point to higher servicing costs on a larger debt pile, jeopardizing Labour’s budget blueprint and raising the specter of austerity, which in turn could undercut what some view as overly-rosy growth projections.

All of that as stubborn services sector inflation prevents the Bank of England from cutting rates as aggressively as they might otherwise like to.

Recall that during the 2022 Truss mini-budget boondoggle, the UK drew comparisons to emerging markets for the (extremely harrowing) combination of higher yields and a weakening currency. Such parallels were back this week as the pound tumbled.

After two weeks of meaningful losses, sterling loitered at a one-year low.

Again, that’s a very bad sign for a developed, hard currency-issuing country. Advanced economies and stable democracies should generally see their currencies strengthen as yields rise. A falling currency with higher yields is the stuff of emerging markets.

Of course, some of the pressure’s coming from outside the UK. It’s not a coincidence that gilts sold off just as Treasury yields were pressured higher in the US, where fiscal concerns are likewise front and center.

But the memory of 2022 — i.e., the Truss debacle — is still fresh, and although the LDI doom loop may not be in play this time around, investors remain very concerned about stagflation in the UK and this week’s events plainly evidence a lack of faith in Rachel Reeves’s stewardship.

Speaking through her attorneys in the letter to Starmer, Truss said the contention she crashed the economy in 2022 “is not only extremely damaging but also indefensible.” A spokesperson for Starmer said he “absolutely stands by” his characterization of Truss’s track record.

If things keep going the way they’re going for gilts and sterling, Starmer and Reeves may find themselves on the receiving end of similarly “false and defamatory” assertions.