Should we trust Sunak or the next PM to fix the Country's problems? (title revised 24/10/22)

[honeybee13]

Thoughts from Andrew Marr on the Conservative party today.

 

 

[honeybee13]

A couple of things jump out of the papers for potential cost savings. Truss's travel expenses and a stiry in the Times about Whitehall wasting £4bn.

 

Liz Truss travel bill in last months as foreign secretary hit nearly £2m | Liz Truss | The Guardian

WWW.THEGUARDIAN.COM

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Exclusive: Lib Dems accuse PM of ‘taking taxpayer for a ride’ with expense of 20 overseas trips between January and June this year

 

[honeybee13]

Article on 'trickle-down' economics.

 

Why is trickle-down economics still with us? | Robert Reich | The Guardian

WWW.THEGUARDIAN.COM

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This gonzo economic theory continues to live on, notwithstanding its repeated failures

 

[honeybee13]

This doesn't look good.

 

Kwasi Kwarteng’s secret meetings with Saudi oil firms revealed | Kwasi Kwarteng | The Guardian

WWW.THEGUARDIAN.COM

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Exclusive: Meetings while in Saudi Arabia undisclosed due to ‘administrative oversight’, says business department

 

[honeybee13]

Another warning from the BoE this morning that LT/KK's growth strategy is still causing problems and they may have to put interest rates up again.

 

Gilt interest rates are back where they were at the beginning of the crisis and the BoE is still having to intervene to help pension funds.

 

The City don't expect Kwarteng to last beyond the end of the month.

 

ETA: From Guardian live Business at 11.09 today.

Reminder: The Bank of England warned this morning that the UK still risks a “self-reinforcing ‘fire sale’”, if pension funds are forced to sell bonds due to tumbling prices.

It explained:

 

The purpose of these operations is to enable LDI [pension] funds to address risks to their resilience from volatility in the long-dated gilt market. LDI funds have made substantial progress in doing so over the past week.

 

However, the beginning of this week has seen a further significant repricing of UK government debt, particularly index-linked gilts. Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability.

[honeybee13]

It's mad, TJ, completely back to front about energy producers.

 

It may change with support for pension funds after the IMF meeting, or you hope it will because it isn't the fault of pension funds. If millions of people find that their income in retirement will be lower because of the current clowns, I think there could be civil unrest at best, riots at worst.

 

Andrew Bailey could be part of the problem because he seems to be in denial over the effect of Brexit on the country's prosperity.

[honeybee13]

Pompous pi**ock.

 

Despite an immediate market reaction to Kwasi Kwarteng’s fiscal event in September, Rees-Mogg said: “You suggest something is causal which is a speculation. What has caused the effect in pension funds … is not necessarily the mini-budget. I think jumping to conclusions about causality is not meeting the BBC requirement for impartiality.”

 

Jacob Rees-Mogg says pensions not at risk as he hits out at BBC | Economic policy | The Guardian

WWW.THEGUARDIAN.COM

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Business secretary claims impartiality guidelines breached by suggestion market turmoil is linked to mini-budget

 

[honeybee13]

James O'Brien has a point here.

 

 

[honeybee13]

One theory is that LT and KK are lining up the BoE governor to be thrown under the bus.

 

If Bailey somehow manages to escape, I guess it'll be KK. Truss isn't going to accept anything's her fault, obviously.

[honeybee13]

Senior economists give the Treasury select committee their views on the mini budget and its aftermath.

 

Mini-budget will not lead to promised growth, leading economists tell MPs | Mini-budget 2022 | The Guardian

WWW.THEGUARDIAN.COM

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Economic confidence in UK seriously undermined by Kwarteng and Truss’s ‘guerrilla tactics’, Commons committee hears

 

[honeybee13]

As far as I know though, the markets aren't reacting against the German government's financial plans. The markets are the most important thing at the moment and can cause further problems for the UK economy.

[honeybee13]

I was meaning the gilt market, where investors are insisting on a 'moron risk premium' to invest in them. Thus putting up interest rates for everyone.

[honeybee13]

I saw that: is it a trap? Only a day or two ago, Smug was saying how great fracking is.

[honeybee13]

Bailey has his failings, but he's not the one that announced a budget that went far beyond what Truss said during her leadership campaign. That's what spooked the markets according to most commentators and you can see it in the rises in gilt rates as soon as the budget was announced.

 

Bailey is just a convenient fall guy for Kwarteng. Until Kwarteng goes, which may not be long

[honeybee13]

I read earlier that No10 and the Treasury have waited for KK to be at the IMF meeting to have discussions without him on dismantling the budget. Maybe she wants to humiliate him into resigning instead of sacking him.

[honeybee13]

According to the Times, senior Tories are talking about replacing Truss and KK with Sunak and Mordaunt, again without a public vote. Is it time for a general election?

 

And, as Kwarteng flies back early from the IMF meeting, recalled apparently, Peston says this.

 

 

[honeybee13]

Truss holding presser today at 2pm, expected to announce that corporation tax will rise in the spring. Kwarteng not expected to be there.

[honeybee13]

Early reaction to Truss's stament seems to indicate the markets think it's too little, too late.

[honeybee13]

From Bloomberg.

 

[honeybee13]

They were so sure they were right. Who thinks KK wasn't enacting Truss's agenda?

 

Kwasi Kwarteng: how ex-chancellor’s fate was sealed by IMF orthodoxy he fought against | Kwasi Kwarteng | The Guardian

WWW.THEGUARDIAN.COM

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Former occupant of No 11 Downing Street finally sacked after financial institution chief’s remarks in Washington

 

[honeybee13]

Looking at that video, Truss is in denial. There can't be many people who see her staying in office for more than a few weeks.

[honeybee13]

They tried managing without orthodoxy and it didn't work. I thought it would take more than six weeks though. 

[honeybee13]

This makes me feel the way you did the other day when Rees Mogg was in the Guardian claiming green credentials, TJ. Assistant editor of the Telegraph saying 'Project Feat was right all along and bemoaning the UK's loss of international standing.

 

archive.ph

ARCHIVE.PH

 

[honeybee13]

Truss isn't being very silent, an article appeared in the Sun late-ish yesterday. It's not clear to me if she's going in the same direction as Hunt. She's still talking in cult-speak - anti-growth coalition is still there.

 

'To deliver for the British people, we need to take on the anti-growth coalition threatening to hold us back.

Leading the charge are Labour, the Liberal Democrats and the SNP who don’t understand aspiration.

 

They just don’t get the British people. That is why they have no plan or vision for our country.'

 

It was a wrench to see my friend Kwasi Kwarteng leave Government but we must build a high-growth, low-tax economy | The Sun

WWW.THESUN.CO.UK

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GOING for economic growth isn’t just my political mission.It’s personal. I know from my own upbringing what it’s like to live somewhere that isn

 

[honeybee13]

Very sad, UB. All this was predicted.