Barings’ collapse is perhaps a spectacular example of the “widowmaker” trade, where speculators think they can outsmart Japanese authorities. They’ve ended up with egg on their face as their gamble on Japan losing fiscal control proved misguided. In the case of the pound and the yen, foreign exchange turnover exceeds trade by more than 100 times. Rachel Reeves risks a different mistake: adopting fiscal rules to appease markets but that ignore reality. Better the budget features a short statement of how government plans will affect the economy – on trade, inflation and investment.