The longer this goes on, and the deeper the crisis, the stronger mandate Labour will eventually have to really change things.
I used to think this about Boris, the difference with him was that he was too idiotic and useless to actually cause a huge amount of harm. Truss seems to be very efficient at breaking things so my worry is how bad will things get between now and an election.
Christ, I almost miss Boris.
Boris put in a really good cycle lane in London that went from Tower Bridge to Westminster, and he knew how to throw a good party.
Johnson did untold damage to the UK. Yeah, Truss is adding to that, but don’t imagine for a moment that Johnson had finished wrecking things. The downward slide and division of the UK would still have continued if he’d stayed in place.
Johnson was a populist, he swayed to what would make him look good, he was also notorious around the departments as not really having conviction to do things, so leaving it to the permanent staff.
Truss is way worse, she has no care of being popular with all, just a select few, and she’s already moved on permanent secretaries to align more with whatever their plans are, she’s doing stuff boris wouldn’t contemplate, which says it all!
An other mini budget announced for 23rd November - Tories giving themselves time to sort out the shitstorm they’ve created, and also after the next BOE review. So I expect this and an emergency rise by the BOE to calm the market a bit, although it’ll remain turbulent as trust in UK GDP has gone.
Anyone still trying to maintain Kwasi Kwartang isn’t a total ****-wit?
With compressing this amount of damage into a single week (and you get the feeling he’s still only warming up), he’s making Chris Grayling look like a beacon of competence and assurance
An other mini budget announced for 23rd November
Any bets on it getting brought forward to say, the first week of October? Let's see if Liz throws her 'close friend' under the bus now.
Anyone still trying to maintain Kwasi Kwartang isn’t a total ****-wit?
Their actions seem to be baffling everyone.
It seems that 99% of economists are predicting a complete disaster.
They cannot be this stupid, I actually think it's deliberate. They are deliberately laying waste to the UK.
Why and under who's direction, I do not know.
No rate rise announcement from BoE, so £ falling again
Kwertang says he will have a costed spending programme ..... in a month
Farcical
https://twitter.com/BruceReuters/status/1574420093206929409?t=TDGLxcTMps5uMdR_ywsNiQ&s=19
Letters of no confidence already being drafted apparently...if the £ hits parity with the $, expect loads to be submitted...
Gobuchal. They are wedded to the ideology and have no dissenting voices around them. I think they genuinely believe the tripe they utter. Its the hubris of those who are intelligent in only one narrow area of intelligence. A total unwillingness to look wider and to take into account alternative views or to look at lessons from history. They are so lacking in some forms of intelligence like emotional intelligence that it is impossible for them to even comprehend that they could be wrong.
They are also being played by a cabal of far right interests who are in effect puppet masters.
They made their views clear a long time ago in " brittania unchained"
Its a mindset that many in politics especially on the right have.
" I want this to be right and I'm so clever it must be right and anyone who says differently is wrong and not worth listening to"
God complex
Big kick can down the road, agreeing to do something knowing full well you won't be the job when you have to deliver it vibes here...
Or just buying time to try to do the homework he should have handed in last week
that smacks of "just say anything"
Mid-term fiscal plan announcement on 23 Nov will have proper OBR scrutiny.
I note that UK financial reserves are c£100 billion which is a big number but inadequate for the GDP ranking.
It's also why the BoE will rely on interest rates as the size of the reserve is insuffucient to support large scale sales and maintain an appropriately sized balance.
Sovereign wealth fund? Oh yeah, forgot the gov of the day decided against when north sea oil was in full flow.
So sterling is going to finish even lower than it did on Friday, isn't it? Sweet baby Jesus. Imagine the media response if this was anyone but the Tories.
You can only blame your predecessors for so long, I reckon they can only say “it was the last lot’s fault” for a maximum of 6 months before it wears thin, even if it is the truth. By the time they leave the Truss Government may well have just ensured the problems a new government has to tackle are too big and they end up as a single term footnote before normal Tory business is resumed…
The tory voters in my office have been tying themselves in knots to justify why they will still vote for them in the next election. They keep trotting out actions Gordon Brown did OVER 15 YEARS AGO as chancellor as justification for everything wrong at the moment.
Kwarteng isn't thick, but he's dangerous because he thinks he's correct despite all evidence to the contrary
Those who says Johnson was not so bad. The damage from brexit in its hardest form dwarfs anything else in terms of damage as its long lasting and almost impossible to reverse.
Trusses nonsense means some lost years but can be reversed and recovered
Those that were hoping for Truss over Sunak because it would might mean short term hurt, but in the medium term makes the Tories totally unelectable; did you really think short term meant 10 days and medium term 'within a month or so'
Guy on 5 live just now saying that it's likely some mortgage payments could.go up by 100%, lenders already pulling fixed deals from the market.
That'll be lots of us ****ed.
Theotherjonv
I didnt think so quickly no.
mortgage payments can be slightly managed for most people by heading interest only or for a very long term - most banks will take a term that finishes well into your 70s, and whilst that might not be great, it can manage affordability in the short term.
anyone who's mortgage was approved in the last 8 (?) years should have been pressure tested against the rates going up by 4%, so it'll get expensive for sure, but it might not be the end of the world.
Housing market should be f..ked though
They can’t change current fixes can they 🥺
sc-xc, depends on the extent to which borrowers stress-tested their finances.
tj, how many lost years do you have in mind and how do you envisage the reversal and recovery taking place?
Housing market should be f..ked though
That will annoy the Tory base...the Stamp Duty reduction won't even touch the sides!
Even if they were pressure tested it won’t have taken all other cost increases in to account. Energy, fuel, food, clothing etc. I think a lot of people are going to end up in a very hard place unfortunately.
I got very lucky and fixed for 5 years at 1.69% in Feb this year. I'll finish paying off my car next year and after that will be overpaying on my mortgage for the remaining 4 years of this deal. I had been thinking of moving house, but i'm parking that idea now, i'd rather just limit my outgoings as best as i can to mitigate the shitstorm that's coming
Those that were hoping for Truss over Sunak because it would might mean short term hurt
No some of us wanted Truss over Sunak because Sunak seemed intent on crashing the economy by not capping energy bills. Truss caved in on that (as we predicted). What wasn't foreseen was that she'd go far further on unfunded tax cuts for the rich than she claimed in her leadership campaign. That is what has spooked the markets. Sunak would have been just as bad.
It's interesting though that Truss/Kwarteng seem happy to burst the house price bubble. That's pretty much the main thing that has propped them up over the past 12 years. When property prices crash their last remaining support will evaporate.
That will annoy the Tory base…the Stamp Duty reduction won’t even touch the sides!
It'll annoy me, we've sold our old flat to some friends who're currently housing a family of Ukrainian refugees, already about 10% below the valuation because of their circumstances if this shitstorm comes to pass then we'll be stuck with two mortgages and whatever happens to house prices 😬
Even if they were pressure tested it won’t have taken all other cost increases in to account. Energy, fuel, food, clothing etc. I think a lot of people are going to end up in a very hard place unfortunately.
Yeah - if it can go wrong it's gone wrong. Our mortgage is up for renewal next year. It's going to be brutal.
Those that were hoping for Truss over Sunak because it would might mean short term hurt, but in the medium term makes the Tories totally unelectable
I was hoping Truss over Sunak because Sunak imo pretty much guaranteed a return to austerity with all its consequences of cuts in education, health, welfare, transport, etc, etc, rising unemployment, all the misery it would cause, and also the extra deaths.
The Truss/Kwarteng high stake gamble of tax cuts and borrowing is frightening for obvious reasons but it still doesn't frighten me as much as austerity.
Sunak is a far better thatcherite than Truss - like Thatcher he would have increased taxation whilst cutting back on departmental spending, only increased costs due to mass unemployment and war caused government spending to increase under Thatcher.
I don't think I want to return to those dark Thatcher days of over 3 million unemployed. I have never thought that was much to differentiate between Truss and Sunak in terms of what was preferential, but I always thought that on balance Truss would be a better choice, I still do.
Our mortgage is up for renewal next year. It’s going to be brutal.
My mortgage is up for renewal in Feb 24. Between now and then every spare penny I've got will be paid into overpayments and reducing the term. Millions of others will be doing exactly the same, and the drop in consumer spending will create a recession in itself without even considering other factors like business failures, inflation and lack of confidence/reduction in investment.
Just remortgaging at the minute. Timed to perfection, eh?
Timed to perfection, eh?
Depends if they pull the deal. Halifax have already withdrawn all their fixed rate mortgages. I wouldn't count your chickens until you've signed the contracts. Hopefully you already have.
The Truss/Kwarteng high stake gamble of tax cuts and borrowing is frightening for obvious reasons but it still doesn’t frighten me as much as austerity.
You think there won't be more austerity under Truss?
If they won't back down on tax cuts, but want to show markets they can keep debt down, then the cuts to public services are going to be huge
Speak to a broker and see if they can get you another fixed rate now. You might have an early redemption fee to pay but I imagine it'll be worth it.
We were expecting a fee of about £1500 or so but the broker managed to get it binned off and got us on a new fixed rate.
I have never thought that was much to differentiate between Truss and Sunak in terms of what was preferential, but I always thought that on balance Truss would be a better choice, I still do.
I'd pragmatically take ideologically opposed competence over incompetence any day.
You think there won’t be more austerity under Truss?
If they won’t back down on tax cuts, but want to show markets they can keep debt down, then the cuts to public services are going to be huge
This!!!
She's a small government ideolog. I've worked for nearly 18 years in the public sector and 12 of that have been under austerity measures, I'm sick of it
@dazh No, just looking now. Current deal expires in Jan. Is an exotic beast too with part commercial on a holiday let/annexe we're developing. Basically funked.
We've always fixed our interest rate for 4 or 5 years. We've always ended up fixing at the completely wrong time.
Our current deal ends in November:-(
tj, how many lost years do you have in mind and how do you envisage the reversal and recovery taking place?
The lost years will be until we get a competent labour government or an independent scotland. Take a similar length of time to get back whats lost. So 4blost years in total.
To me johnson truss or sunak makes very little difference. All hardline tories following absurd policies.
The important thing is getting a long term labour government for england and an independent Scotland and truss imo makes both more likely
Agreed, but I think it will take decade or more to sort this out properly. And that’s counting from when/if the Tories are out. Still hoping for a proper union of nations, rather than full Scottish independence, myself. But all my friends north of the border are set on independence now, and I can’t blame them.
Anyway…
https://twitter.com/antonymciver/status/1574400167377219584?s=21
14 lost years of tory government in total will take a decade to get back what is lost. The 4 years just refers to the damage truss will do not what the kast 12 have done
This is serious, we are on the edge of something possibly worse that Thatchers readjustment.
Thing is this has been manufactured by the Tories.. this is not a response to a wider problem or step change in a global economy.
Full Minford.
Full Mogg
Kwerteng seems to be saying he will outline a plan that will show how he will reduce borrowing as a % of gdp. Hmmmmmm.
Now im no economist but that would mean massive growth would it not given how much he is borrowing? Growth that the uk has not seen for a long time in a time of low growth/recession world wide
Hmmmmmmmmm. Do you think its a cunning plan?
Yes to **** off with a massive hedgefund pay off.
10% of Crispins short.
They are literally making it up as they go along, based purely on their frankly insane ideology. It’s like a cult! The Talibanisation of economic policy
It’s just more Brexit bollocks.
No economic forecasts or proper analysis required, no dissenting or alternative voices tolerated, we’ve had enough of experts, you just have to BELIVE and it’ll all be fine
Sunny uplands ahead
They’re absolutely ****ing unhinged, the lot of them!
The important thing is getting a long term labour government for england and an independent Scotland and truss imo makes both more likely
What do Wales and NI get?
Two dog's
The get forgotten about. Sorry.
Stephanie Kelton piece today.
Now that we have seen the so-called “mini-budget,” there is plenty of speculation about what comes next. As a reminder, the Truss/Kwarteng budget, which was reportedly “fleshed out with senior aides over coffee and biscotti in Truss’s living room in the third week of August,” is a huge gamble on supply-side economics. And it’s only the beginning.
The next shoe to drop comes later in the year when the rest of the government’s fiscal plan is released. With the mini-budget roiling currency and bond markets, many observers expect Truss and Kwarteng to announce massive spending cuts to the public sector in order to “restore market confidence.”
If you remember anything about the Reagan era and David Stockman’s playbook, then you know how this game is played: (1) push through massive tax cuts that disproportionately benefit the rich; (2) claim the tax cuts will “pay for” themselves through higher growth; (3) watch the debt and deficit soar; (4) clutch pearls; (5) demand cuts to public programs as the only alternative (TINA).
Already, some economists are asking whether the mini-budget should be viewed “a Trojan horse for a massive attack on the welfare state.” Such an attack would be politically unpopular. Unless, of course, it could be carried out under the cover of TINA. The economics editor at The Spectator, has speculated that the mini-budget will push the Bank of England to hike interest rates even more aggressively. If they do, she says it might be “a design feature, not a design flaw, of Truss’s plan.”
Now im no economist but that would mean massive growth would it not given how much he is borrowing?
Seems like fairly basic maths. Unless the plan is to reduce it as a % of GDP by the 2050s. Not even sure he can do that.
Now im no economist but that would mean massive growth would it not given how much he is borrowing?
I'm fully expecting still at this point Q/E.
Don't forget the USD is and has been very strong. It's day will come for a wobble soon. Euro/USD and YEN/USD all had a hard time.
Market expectations over news tend to drive prices. Market is probably expecting the BoE to act soon.
These things are cyclical too.
Would reducing public spending have any effect on debt to gdp tho ?
Im sure they will reduce public spending tho.
tj - a truly independent Scotland would be economically damaging for both scotland and the shrunken UK.
The UK economy will be permanently scarred by truss/kwarteng; it's reputation as an honest partner has already been shredded by brexit and the NI protocol.
As for growth, there have only been 9 years since 1949 when the annual growth in UK GDP exceeded 5% - and one of those was the 2021 recovery.
Good luck with your growth plan kwasi...
Imo a independent Scotland will be both richer and fairer but you are right the loss of scotland and its contribution to the uk economy would damage ruk badly but lets not derail this thread. We have done it to death or start a new thread?
rone
Full MemberAgainst inflation though it’s negative.
True but from experience, a huge amount of people don't see it. I used to work in a bank branch that had a fairly ageing but well off customer base and you'd get people coming in with their .2% savings accounts and refusing to upgrade to a new product with a better rate because they'd have to pay more tax. Stuff like that. Saving's always seen as responsible, as a good thing to do, even when it's negative, and if you tell people they're getting an extra 1% even if they live off their savings and costs go up 2% then there's cognitive dissonance or something.
frankconway
Full MemberBut…an emergency intervention by the BoE will be seen as a panic reaction
Panic reactions are completely appropriate at this point. If you can keep your head when all around are losing theirs, it's quite likely you just don't understand the situation.
kelvin
Full MemberJohnson did untold damage to the UK.
Even for the people who think Truss is worse- and she's achieve an astonishing amount, in the 19 seconds she's been in charge- the blame for Truss rests on Johnson, there's no other scenario when she would ever be in power.
thisisnotaspoon
Full MemberI’d pragmatically take ideologically opposed competence over incompetence any day
Up to a point. But I'd quite like the person that's trying to shoot me in the head to be a really terrible shot. Johnson would have drunkenly missed, shot his wife, and everyone'd laugh at the hilarious version of that story that he'd tell at his next wedding. Truss will miss too but leave you horribly wounded and then everyone'll tell you how grateful you should be not to be dead.
.
There will be massive public sector cuts in November... small state ideology.
Civil service
Central gov
Local gov
FE colleges
Transport
Farming support
All other areas including NHS, Emergency Services, Police, Schools etc frozen for three years minimum
Euro/USD and YEN/USD all had a hard time
Maybe. But Sterling fell against all currencies. This is not just about a strong dollar, it is a response to the UK not having a plan to deal with either the economic harm it has imposed on itself, or the wider economic challenges facing all countries right now. The Tories need to move aside now, before they inflict more damage on us all.
Up to a point. But I’d quite like the person that’s trying to shoot me in the head to be a really terrible shot. Johnson would have drunkenly missed, shot his wife, and everyone’d laugh at the hilarious version of that story that he’d tell at his next wedding. Truss will miss too but leave you horribly wounded and then everyone’ll tell you how grateful you should be not to be dead.
Maybe, for the most part government's of either colour muddle allong fiddling with the margins and neither doing brilliantly or collapsing the economy.
The metaphor I was mulling over was a red bus or a blue train, both aim to get to the same place just with different routes*. Then a Nissan Bluebird pulls up, promises to take you there for free, but once your in and the doors at locked you realise the driver is a maniac and shows you the machete in the glove box.
*Ironically the train required more government investment, so it's not a perfect metaphor.
Get ready for the attacks on public sector workers from the press. Bankers no limits to bonus to stimulate growth PS pay rises nilled for next 3-5 years to save the economy.
Public and private sector. Workers wanting to slow the speed of their impoverishment will be blamed for the effects of government choices, to try and distract us from just how badly they have handled the last few years.
You think there won’t be more austerity under Truss?
On balance, probably not. I said during the Tory leadership election that Truss was saying that you can have your cake and eat whilst Sunak wasn't offering any cake.
Sunak might come across as a pretty straight kind of guy, as Tony Blair claimed to be, but imo he is a hardline Thatcherite. As Daz suggested I can't see that Sunak would have offered the same energy price support package that Truss has come up.
Like Thatcher didn't flinch when her economic policies caused unemployment to double to over 3 million I feel fairly certain that Sunak wouldn't have flinched as fuel poverty left millions of people unable to keep warm this winter, and he would have cared about firms going bust about as much as Thatcher did - not a lot.
The evidence is there:
On balance I reckon that Sunak's thatcherite economic policies would have been even more detrimental to ordinary working people than Truss's.
Obviously no one can know for certain what might have happened under a Sunak premiership, nor will we ever, nor do we know with complete certainty yet how things will pan out with Truss's economic policies.
The only thing that we can actually certain of, imo, is that both Sunak's and Truss's rightward economic thrust would/will make a bad economic situation even worse (from a working-class perspective). And as usual it will be working people who pay the price and make the sacrifices.
Had the news on today and a couple of time I've heard someone from a think tank (who funds them they never say) saying about the massove cost of public sector pensions. If you have one I think they are getting ready to steal it off you.
tj - I have no wish to derail the thread by getting into a debate about economic fallout from scottish independence.
northwind - the (inevitable) market panic I referred to has been deferred by the BoE until the next MPC meeting so only nervousness at present.
If you remember anything about the Reagan era and David Stockman’s playbook, then you know how this game is played: (1) push through massive tax cuts that disproportionately benefit the rich; (2) claim the tax cuts will “pay for” themselves through higher growth; (3) watch the debt and deficit soar; (4) clutch pearls; (5) demand cuts to public programs as the only alternative (TINA).
That surely leaves out an important element - that government spending went up under Reagan primarily because of a humongous increase in defence spending? Cuts in public programmes weren't simply because of tax cuts but also because of increased military spending.
saying about the massove cost of public sector pensions. If you have one I think they are getting ready to steal it off you.
Nothing would surprise me - they seem intent on something...
Radio 4 had a documentary on about the think tanks based in 55 Tufton St
From brexit to austerity to the present sh!tshow they've been driving the Tory agenda and slowly gutting the country
Tragic that so many people are taken in by these opaquely funded think tanks & believe that they are on their side
https://redfieldandwiltonstrategies.com/latest-gb-voting-intention-25-september-2022/
This poll was taken yesterday so the first one published since Thursday's mini budget. TBH I am surprised that the Labour lead isn't bigger as Redfield & Wilton polls a couple of weeks ago were giving Labour a 12 point lead.
I found this interesting though:
"only 60% of those who voted Conservative in 2019 say they would vote Conservative again"
That is a huge drop in support for the Tories.
TBH I am surprised that the Labour lead isn’t bigger
Average new leader bounce at this point is +6pts , so -3 overall Vs labour is pretty poor
That said in genuinely surprised that Tory vote still claims 29% base- who are these people?!?!
the massove cost of public sector pensions. If you have one I think they are getting ready to steal it off you.
Most people don’t realise that public service pensions are simply paid for through taxation, there’s no sovereign wealth fund or investment vehicle - the reality being that their contributions are long spent and that it is today’s tax payers that are paying their pensions. The running narrative in the MSM that civil servants are ‘enemies of the people’ are are subverting Government when it is they that hold them to account is unsettling.
Austerity V2 is coming - Buckle-up, we’re in for a bumpy ride.
Dovebiker
Nhs pensions take it vastly more in contributions than they pay out per year. The pensions have already been gutted anyway
Most people don’t realise that public service pensions are simply paid for through taxation
Some are, others are invested.
kimbers
That said in genuinely surprised that Tory vote still claims 29% base- who are these people?!?!
Three I know of...
My sister and bil, it's all about the triple lock and a huge amount of racism.
A friend down the road, it's all about living in some utopian past as he sees it and huge dose of racism.
Nhs current workers pay for the pensions of the retired and a tidy sum to the exchequer
Six in 10 voters think Kwarteng's budget was unfair
I can't believe it is only six in 10, what is wrong with people?
Wasn't thinking that they will take what has been paid into pensions, that has gone as said above. I think they will cut what is being payed out no matter what was promised when you signed up.
Nhs pensions take it vastly more in contributions than they pay out per year. The pensions have already been gutted anyway
Whilst you could argue that's technically true, it is a mischaracterisation. The nhs pension scheme did pay out £4bn to the exchequer last year, just under 10% of the total money collected. At the same time, its liabilities rose by a whopping $100bn. Additionally, the majority of payments made into the fund are from the employer side, and the employer the majority of the time is (indirectly) the government - so the members themselves are in no way net paying to the exchequer for pension provision.
