The reason that even a small absolute rise in interest rates caused asset prices to crash in 2008 was that the trashing of currencies by continually increasing liquidity – The Greenspan Put – after 1987, had artificially lowered yields, with no increase in surplus value, sufficient to compensate. Yields fell so low that, even the tiniest rise in interest rates, represented a huge proportional rise, and a corresponding huge fall in asset prices, as a result of capitalisation. The delusion of conservative social-democracy that wealth could be created out of thin air, simply by inflating asset prices had run out of road. That attempts, after 2010, have again resulted in the surreal conditions of negative yields, simply underlines the point that this model can no longer work. Even negative yields, financial austerity to limit economic growth, and even the physical lockdown of economies, not to mention Brexit and Trump and Biden's trade wars have not stopped the underlying laws of capital from poking through, and causing the demand for labour and capital to rise, and global interest rates to rise.
The conservative social-democratic centre could not hold. The two immediate alternatives were on the Right and Left. Hence the growth of a petty-bourgeois, populist Right, which had grown along with the growth of the petty-bourgeoisie itself after 1980. From being the foot-soldiers of conservative parties like that in Britain, the Republicans in France and the US, they either seized control of those parties, or split to form alternatives to them such as UKIP, and so on. They asserted all of those traditional petty-bourgeois nationalist ideas that were already dead by the late 19th century, and even more delusional today, but for which they were able to mobilise electoral support, in conditions where conservative social-democracy, had so clearly failed, with the GFC and its aftermath, and where the ruling-class, as it had done in the 1970's, shrank away from the alternative of progressive social-democracy, for fear of unleashing the forces of the industrial proletariat. The fact, that any such turn to progressive social democracy, of returning to the idea of the need to accumulate real industrial capital, to produce the surplus value required to fund their own revenues (interest/dividends, rents, taxes) would also, cause interest rates to rise even more sharply, and so asset prices to crash even more spectacularly than in 2008, was a further obstacle to such an alternative. Hence, the determination to defeat Syriza, Podemos, Sanders and Corbyn by any means.
But, in doing so, the ruling class, in trying to cling to conservative-social democracy has only dug itself into a bigger hole, just as it did, in printing money tokens to try to keep asset prices inflated. Rather than consolidating the centre, it has simply strengthened the petty-bourgeois Right nationalists, whose interests are imminently antagonistic to their own. In France, the result was to strengthen the forces of Le Pen, in Germany of the AfD, in the US of Trump, in Britain of Farage. And, now, we see the logic of that play out, as Trump and his petty-bourgeois nationalist regime causes interest rates to rise, and asset prices to crash, anyway. The same happened with the rise in UK rates under Truss, and now with the government of Starmer/Reeves.
So, why would the ruling class in any way see Brexit Britain, which has been headed down that same route for the last 40 years, as in any way a bridge, other than a bridge to nowhere, a step only into the abyss? The only glimmer of rationality for the ruling class, resides in the attempts of the EU to cling to social-democracy, and those same petty-bourgeois forces are also fracturing even that, with the consequence of Brexit Britain being not to act as a bridge, but as a conduit, and support for them.
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