UK economic chaos, pound plunge hit businesses

The tax cuts are crazy and irresponsible, the work of a demented mind. Truss's days could well be numbered, and I'm talking very low digits.

JeffLeeToday  07:16 am JST

The tax cuts are crazy and irresponsible, the work of a demented mind. Truss's days could well be numbered, and I'm talking very low digits.

hope so.... but the alternatives are equally dire. let's face it, politicians get into that game because they're inept at everything else....

Prime Minister Liz Truss and Chancellor Kwasi Kwarteng actually thought that borrowing large amounts to splurge on unfunded tax cuts would go unnoticed by the financial markets.  

Borrowing costs has been flat for a decade, so subsequent governments have been filling their boots.

George Osbourne 2010 to 2016 borrowed to bail out the UK banks from global financial crisis. However, Osbourne brutally cut government spending, the then labour opposition, to this day refers to as tory austerity.

No one can for a moment suggest they didn’t see this coming. Did homeowners that took out mortgages for property at interest payments hovering at 1 - 2% seriously believe would remain at such a level indefinitely!???

At the same time holidaying on their flexible friends? Car loans? That new conservatory?

With a global economy wallowing, no drowning in cheap as chips wonga, money, money, money equalled borrow, borrow, borrow, of course it is free!!

What a load of old nonsense.

Like a credit card delinquent, sooner or later the bailiffs come knocking.

Then the pandemic struck, more borrowing.

The one person that warned Truss, former Chancellor Rishi Sunak, on the Conservative leadership campaign was howled down. By both his own party and the labour opposition.

The danger of rampant inflation was clearly evident in early 2021 as global supply chains started to buckle and production cost started to rise.

With the war in Ukraine and the Putin’s strangle hold on the energy market a perfect storm of economic misery is upon us.    

That is Europe as a whole, inflation in Germany, Holland is advancing faster than the UK.

The run on the pound has been brought under control for two weeks tops, as the BOE gilt/bond buying program runs it course.

Central banks sat on there hands instead of raising interest rates to counter the inflationary pressures. The US FED didn’t and took remedial action straight away

Labour, in the polls is sitting on, what appears as an unassailable lead.

The electorate seriously believes Keir Starmer, Angela Rayner will make the slightest difference. They won’t not for a moment, just fall back on past pledges of future gold at the end of a green new deal rainbow.

A wealth tax on the middle classes, and a windfall tax on the energy companies they will be relying upon to support there green new deal. None will there shareholders will see to that.

The Damage was complete a long time before economic dimwits Truss and  Kwarteng came stumbling over the horizon.

UK electricity

Oct 2020, 17.2p/kWh (¥24) -----------------------Oct 2022 51.9p/kWh (¥83)

UK gas

Oct 2020, 3p/kWh (¥48)-----------------------------Oct 2022 10.3p/kWh (¥164)

Japan electricity ¥25/kWh. Gas ¥12/kWh

The UK us not the most expensive in Europe.

My family is struggling with their energy costs.

One chain, Weatherspoon is closing down 32 pubs.

People have had their mortgage applications cancelled.

Train strikes, post office strike, barristers strike.

Sterling has gone from $1.65 to near parity under the Tories, turbo-charging inflation and beggaring the nation. Johnson and Truss - the idiot wing of the Tory party - have been economically incompetent. MMT is not a silver bullet for fantasy policies. Most things are priced in dollars and it was inevitable that the markets would respond to this failure. The business community lost faith in the Tories at Brexit. The other major chunk of Tory support all have mortgages - a section of society that inevitable rate hikes will now hammer.

The Tories have run the country into the ground. Labour don't have to be trustworthy or competent any more. They just have to not be the Tories and they will walk the next election. The Tory faithful just couldn't bring themselves to pick an Asian to run the party, fantasising instead that Truss would be Maggie 2.0. Reality hit home even quicker than most people expected.

The energy support caps rises at about 27% with extra support payments and is a necessity. Both Truss and Sunak were going to do that. The bizarre, unfunded tax cuts are an obsolete mantra from the past, and make no sense with the global economy undermined and Brexit torpedoing the UK economy below the waterline. Like many, any benefit I would get from them has been wiped out multiple times over by the decline in sterling (buying stock), the increased cost and complexity of getting anything across borders, and the progressive impoverishment of my customers. Plus the supermarket shelves have less on them each week.

It's like the lunatics took over the asylum - Brexit, Johnson, Truss. The UK was a good place to live and do business before all that. It is now an international joke with a fracturing economy, spiking poverty and shortages. The last two regimes should be in prison, not parliament. They have damaged the UK more than the Third Reich did or the Russians could.

It's difficult to see Truss doing a U-turn on her tax plans without resigning. But without a U-turn, the Tories are going to get buried at the next election. To survive, they may need another one of those leadership elections, and very soon.

Before I burn Truss and Kwarteng at the stake of fiscal and monetary incompetence, November 5th, Guy Fawkes night will soon be upon UK, wondering who or what effigies will be taking center stage on the bonfires up and down the country?

The tax cuts are a interesting gamble, Truss roll of he dice, the middle ground tax player £150,000 - £300,000 would benefit, how that would tickle down is a complete mystery though.

The so called serious wealthy, say yearly over £1,000,000, employ accountants, tax lawyers, wealth structuring, ,the provision of instruments to divest liability, the sorcery of private trust companies/family investment companies, wouldn't be concerned, or take advantage of changes to the higher rate of income tax.

Example Gary Lineker.....channels freelance earnings though a personal service company, Gary Lineker Media,

Perfectly above board, Lineker also is holder of directorships in a number of other companies.

Four prime ministers in 12 years. How long will Truss last?

The one person that warned Truss, former Chancellor Rishi Sunak, on the Conservative leadership campaign was howled down. By both his own party and the labour opposition

He wasn’t the only one. Former Tory chancellors including Ken Clarke warned of the effects of this ‘triumph’ of ideology over common sense.

The more idiotic elements of the right were trying to blame fear of a Labour government ( an election isn’t due for another 2 years ), remainers ( ? ) and dislike of Liz Truss for the chaos the Tories unleashed.

The Tories are miles behind Labour in every poll I’ve seen. You have to worry about what gambles they will be prepared to make to try to make a dent in that.

The tax cuts are crazy and irresponsible, the work of a demented mind. Truss's days could well be numbered, and I'm talking very low digits.

I agree, what on earth is she thinking?

If Truss is destined to be forced out of office, how would this be achieved?

Well one way could be to change the party’s leadership rules. It would be brutal/ruthless, the plotting grey men, would avoid another long-winded leadership race and manoeuvre the perceived safer pair of hands, former Chancellor Rishi Sunak runner up into office.  

Such and act would drive a coach and horses through any semblance of respect or democratic mandate of/too conservative party membership.  

Unless Truss is privy to economic mystic meg insight to the direction of fiscal and monetary global changes, Truss tenure in office could be measured in weeks.

The one political primacy Boris Johnson could always be relied upon in office was his ability to dither, do little/nothing, hope for the best., or throw a party.  

Rachel Reeves shadow chancellor, is one of the most economically and politically competent MPs in the commons. Reeves hatchet job on Truss government is structured to hit the target audience dead centre.

Labour will not waver from putting the UK economy on secure ground

https://www.theguardian.com/commentisfree/2022/oct/01/labour-will-not-waver-from-putting-the-uk-economy-on-secure-ground

When the BOE bond buying program winds down 14th October, interest rate will need to rise. If not before. As the price of energy, food etc works it way through the system.   

Plotters within the conservative party rarely turn the other way.

Rachel Reeves shadow chancellor, is one of the most economically and politically competent MPs in the commons. Reeves hatchet job on Truss government is structured to hit the target audience dead centre

Good point. Starmer isn’t inspiring although his speech at the Labour conference was quite good. Rayner is the target of a lot of snobbery but she isn’t the most eloquent.

Reeves comes across as competent, bright and someone who does her homework.

Labour would do well to put her more front and centre.

Cod and chips at Ollies is 14 pound 50. That's about 2350 yen per person for a takeaway. Its 10 pounds or thereabouts is many parts of the country now.

After the UK's royal funeral euphoria the sudden drenching from "TRICKLEdown" Trussonomics and the Kamikwasi mini-budget plane crash will have opened the eyes of many a self-deluded punter who switched off their brains to believe Bozo's Brexit hokum and the mesmerizing "take back control" mantra rather than their own "lying eyes" that should have told them they were voting for a Ponzi scheme. Now the Tories face a winter of discontent among their cult believers when lights are dimmed and eat or heat becomes a stark choice for the many who have been tricked and trickled on by the usual suspects.

The Tories have always been made up from Rich Oxbridge kids who haven't done an honest days hard work in their lives.

Trickle-down economics, is a load of rubbish. It's a smash and grab, more money for those with it, and they will simply "keep it for a rainy day"...

The UK is heading backwards towards the days depicted in the Poldark TV Series...

It's going to take a Miracle to keep them in Power....

The tax cuts are crazy and irresponsible, the work of a demented mind. Truss's days could well be numbered, and I'm talking very low digits.

Not just tax cut, it's tax cut + increase government spending (how does that work?). Truss has proven to be a door mat for oil&gas dudes, and pretty much useless for the rest of the country.

I still can't believe they ditched BoJo for Truss, well at least it's not the Paki banker.

Worst still, even though the BoE saved them (ie the Gilts market in the short term) the idiots in parliament are talking more coordination with the BoE, ie less independence for the BoE.