|
|
Post by no1novice on Sept 28, 2022 16:59:00 GMT
If she can do this much damage is 22 days imagine what damage she can do in 22 months (until the next election). Emergency Bank move will not solve the problem By Faisal Islam Economics editor Published 2 hours ago comments Comments Woman at cash machineImage source, Getty Images This is an immense show of force from the Bank of England trying to calm borrowing markets. It is already having an impact. It also raises some questions. First and foremost it underlines that this is a crisis, with the Bank responding in emergency mode. The clear cause was the chancellor's mini-budget, leading to a loss of market confidence, and spiralling borrowing rates on government debt. That crash in the value of loans to the government threatened to become a "material risk to financial stability", says the Bank. That risk was apparent most immediately among pension funds. That's what prompted the Bank of England's dramatic intervention. Pension funds hold a lot of government bonds, known as gilts, because they are normally such a stable investment. As their value plummeted concerns grew for pension funds' solvency, raising the question whether they'd have to sell off other assets, such as stock market shares. So the Bank will now, for a temporary period, buy up government bonds in unlimited quantities. The effective interest rates being charged to the UK government in these markets, which was spiralling to 20-year highs, has now fallen back. But it was not a decision made by the Bank's Monetary Policy Committee, who were informed of the decision after it was made by the Bank's financial experts. It comes at exactly the same time as that committee had been committed to do the exact reverse policy - selling government debt. That process was due to start next week and has now been delayed. Bank of England steps in to calm markets Mortgage deals withdrawn in record numbers Kwarteng sent stinging and unusual rebuke by IMF It is a massive intervention, and while it will not solve the government's problems, it might buy them some time. But it could confuse markets about the clarity of policy making and lines of accountability. Sterling has fallen sharply again, close to all-time lows. The intervention was driven specifically by the need to stave off chaos in the corner of the financial services industry that underpins pension funds. This explains why the Monetary Policy Committee, that normally authorises bond-buying, did not make this decision. Insiders are adamant that this decision does not signal anything about where interest rates might go, and is not a form of loosening monetary policy or "printing money", creating it out of thin air to help a troubled government with its funding. But all of this is only required because of the violent turn against British government debts since the mini-budget. It is a dramatic emergency medicine. The risk still lingers. It does not solve the underlying problem. www.bbc.co.uk/news/business-63065413
|
|
|
|
Post by no1novice on Sept 28, 2022 17:01:28 GMT
BBC News Live Feed
|
|
|
|
Post by no1novice on Sept 28, 2022 17:10:16 GMT
Rebuke from IMF is a global embarrassment for Truss and KwartengLarry Elliott Economics editor Will PM and chancellor ignore advice under mounting pressure, which is also coming from US and Germany? IMF urges UK government to reconsider tax-cutting plans  British prime minister, Liz Truss, and the chancellor of the exchequer, Kwasi Kwarteng, attend the government's growth plan statement at the House of Commons, London, on 23 September 2022 Wed 28 Sep 2022 11.10 BST Last modified on Wed 28 Sep 2022 11.32 BST Liz Truss and Kwasi Kwarteng have taken on the economic orthodoxy. They have announced extra borrowing to pay for tax cuts. They have sacked the Treasury’s top mandarin. They have insisted they will press on with their dash for growth despite a hostile reaction in the markets. Now the economic orthodoxy has struck back – and in the most high-profile way possible: a public and stinging rebuke from the International Monetary Fund (IMF). It is hard to overstate just how severe an embarrassment the dressing down from the IMF is for the government, which has been told to rethink last week’s mini-budget. The blunt language used by the IMF spokesperson was the sort normally reserved for a struggling emerging market economy seeking financial support. The UK is not in that position. There is no immediate prospect of Kwarteng needing a bailout but the IMF’s intervention highlights just how quickly the chancellor’s strategy has unravelled. It also illustrates the IMF’s concern that a full-on financial crisis in the UK could have ripple effects through an already vulnerable global economy. The IMF has two main concerns. First, it is worried that what the Treasury is doing with tax and spending (fiscal policy) is at odds with what the Bank of England is doing with interest rates (monetary policy). Second, it is opposed to the blanket support the government is providing for energy bills, and would prefer more support to be going to the neediest. “ Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” it said. Kwarteng has announced that he will make another big fiscal statement on 23 November, and the IMF has recommended that he use it to “consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high income earners”. The IMF is itself taking a risk because by issuing such a public rebuke it might further undermine confidence in the UK. Kwarteng and the governor of the Bank of England, Andrew Bailey, have been trying to reassure markets and put a floor under the pound. The IMF’s intervention is not helpful to their cause, and could conceivably be the catalyst for a fresh run on the pound that would prompt emergency action from the Bank’s monetary policy committee. Truss and Kwarteng now have a big decision to make. They can ignore the IMF’s advice, which is what they would prefer to do. Or they can bow to the mounting pressure – which is coming not only from the IMF but also from the US and German governments – and have a rapid rethink.In truth, the decision may soon be taken out of their hands because financial crises tend to have an unstoppable momentum of their own. As chance would have it, 28 September 1976 was the day when an earlier sterling crisis went into overdrive. The then Labour chancellor, Denis Healey, had to abandon plans to fly to an IMF meeting in the Philippines because the pound had hit the skids. Healey once said the first law of holes was that it was best to stop digging if you were in one. The IMF is giving Kwarteng similar advice. www.theguardian.com/business/2022/sep/28/rebuke-from-imf-is-a-global-embarrassment-for-truss-and-kwarteng
|
|
|
|
Post by no1novice on Sept 28, 2022 19:07:05 GMT
What does this mean for buying food and other essentials?
Myron Jobson
Senior personal finance analyst, Interactive Investor
Alex Groeger asks what the UK's financial situation means for the spending power of their money - including for things like food and other household essentials?
Higher interest rates typically mean savings will earn more – although some banks and building societies may still be catching up to past base rate rises.
However, runaway inflation continues to erode the purchasing power of cash savings in real terms.
To put this into perspective, inflation hit 9.9% last month - over 14 times more than the average savings rate on an easy-access account over the same period.
Part of what’s impacting inflation is astronomical price gains in energy and food. These types of inflation can be even stickier because consumers are resigned to paying the costs because the goods are essential ones.
While inflation might not bite as hard thanks to the government’s unprecedented multi-billion-pound cost-of-living support measures, consumers will still need to strap in for an extended period of high inflation.
|
|
|
|
Post by sputnik on Sept 29, 2022 0:53:48 GMT
"Between Brexit, how far the Bank of England got behind the curve and now these fiscal policies, I think Britain will be remembered for having pursuing the worst macroeconomic policies of any major country in a long time." from the bbc a few days ago www.bbc.co.uk/news/business-63009173 |
|
|
|
Post by mrsfawlty on Sept 29, 2022 19:16:08 GMT
This shitty, incompetent b1tch and her government are heading towards an IMF Bailout if they don't come up with a coherent plan soon, although there's more chance of seeing unicorns!
|
|
|
|
Post by coppercatseye on Sept 29, 2022 19:43:35 GMT
I’m so sorry for what’s going on in the UK and was saddened to see the pound sink so hard against the dollar on Monday. Hoping that Truss and the Tories will be on their way out as soon as possible.
|
|
|
|
Post by no1novice on Sept 29, 2022 20:31:31 GMT
Well, we could have the next GR meet up in the UK since £1=$1 right now! Buy your holiday money!
Thanks popbitch for the smile!
|
|
|
|
Post by greysfang on Sept 29, 2022 21:17:10 GMT
She even looks like a young Margaret Thatcher.
|
|
|
|
Post by kittylady on Sept 30, 2022 1:57:40 GMT
Well, we could have the next GR meet up in the UK since £1=$1 right now! Buy your holiday money! Thanks popbitch for the smile! Well she's certainly not shy about using her back to get forwards after shagging her political mentor (whose career as a politician has ended while hers has inexplicably soared). I still find it ridiculous that she's PM. Her 'career' hasn't exactly been glorious - she barely seems to have lasted 18 months (or less) in all her postings. It's almost as if she was useless and everyone knew she was useless but had to keep her for some unknown reason so kept shuffling her about to make her somebody else's problem. |
|
|
|
Post by no1novice on Oct 2, 2022 9:32:49 GMT
Well, it seems that she is also incredibly stupid. Acknowledges that there are issues with her plan but is going ahead anyway? Surely this could/must be classes as treasonous??? Liz Truss admits Budget blunders saying she has 'learned' from market meltdown as she kicks off Tory conference - but PM insists she WILL push on with tax-cutting plan despite Michael Gove joining revolt by MPs * Liz Truss is kicking off Tory conference in Birmingham amid backlash over Budget causing market turmoil * Poll shows Labour 19 points ahead in latest grim signs for the Conservatives about the damage from chaos * The PM vows to stick to tax-cutting plans and warns that there is no option of sticking with the 'status quo' Liz Truss admitted blunders over the Emergency Budget today she kicked off Tory conference - but warned restive MPs not to retreat to the 'status quo' after the markets meltdown.Launching the gathering in Birmingham against the backdrop of the Pound's plunge and a surge in borrowing costs, the PM accepted that the government should have 'laid the ground better' before unveiling the package - which spooked traders with a lack of independent OBR costings and a plan for managing debt. However, Ms Truss said she had 'learned' from the events and would push on with her 'very clear plan' to get the economy growing again. She backed the decision to axe the 45p top rate of income tax but said it was taken by Chancellor Kwasi Kwarteng without consulting the Cabinet. 'I want to reassure people that we do have a very clear plan,' she told the BBC's Sunday with Laura Kuenssberg. 'I understand their worries about what has happened this week... I do accept we should have laid the ground better... 'I have learned from that and I will make sure that in future we do a better job of laying the ground.' Ms Truss dodged repeatedly on whether the government is now proposing to cut public spending to help balance the books, merely claiming services will remain 'excellent' and Chancellor Kwasi Kwarteng will give details next month. She shrugged off a row over Mr Kwarteng attending a drinks do with City traders immediately after the Budget, joking that she did not manage his diary. The grim political consequences of the market turmoil for the Tories was laid bare with an Opinium poll putting Labour on 46 per cent, 19 points ahead and enough for a landslide election win. Others have shown Keir Starmer's party with an advantage of up to 33 points. Former Cabinet minister Michael Gove waded into the row this morning, saying 'mistakes' need to be 'corrected' and refusing to confirm he will vote for the Budget legislation in the Commons. After listening to Ms Truss on the same show, he said there was an 'inadequate realisation' about the level of changed required. He suggested the axing of the top rate of tax must be reversed, along with the scrapping of the cap on City bonuses - and urged Mr Kwarteng to bring forward his fiscal statement from November 23. www.dailymail.co.uk/news/article-11271651/Truss-warns-Tories-not-retreat-status-quo-markets-meltdown.html |
|
|
|
Post by kittylady on Oct 2, 2022 23:08:02 GMT
Fuck off with this shit! You can't just treat the economy and security of the people like an experiment with a limitless supply of test subjects! You need to be pretty damn certain that what you are going to do will work! There is no "Toss it off a cliff. Whoops, that one didn't fly, pass me another" option here.
|
|
|
|
Post by mrsfawlty on Oct 4, 2022 12:53:49 GMT
Fuck off with this shit! You can't just treat the economy and security of the people like an experiment with a limitless supply of test subjects! You need to be pretty damn certain that what you are going to do will work! There is no "Toss it off a cliff. Whoops, that one didn't fly, pass me another" option here. After she crashed the economy, she seems oblivious to the fact that all the money lost will never return! By the way, looks like Rhet Butler still isn't too enamoured with Scarlett!  |
|
|
|
Post by no1novice on Oct 4, 2022 18:18:09 GMT
|
|
|
|
Post by no1novice on Oct 14, 2022 11:29:56 GMT
14 minutes (including security checks) to sack the chancellor. www.bbc.co.uk/news/live/uk-politics-63221738Summary Kwasi Kwarteng is no longer chancellor after meeting Prime Minister Liz Truss at Downing Street Truss will hold a news conference later, as speculation builds that the government could reverse more of the tax cuts announced in its mini-budget Kwarteng flew back to the UK for urgent talks with Truss this morning after cutting short a meeting with international finance ministers in Washington DC Earlier, a No 10 source told the BBC that Truss thought the chancellor was "doing an excellent job" The PM faces growing calls from within her party to rethink her economic plans, with one Tory MP telling the BBC: "It's checkmate, we're screwed” 12:24
BreakingKwarteng out as chancellorKwasi Kwarteng is no longer chancellor, the BBC understands. It comes amid speculation Truss will today announce a U-turn on parts of the mini-budget. 12:10 BreakingChancellor pictured arriving at No 10 Kwarteng  PA MediaCopyright: PA Media Chancellor Kwasi Kwarteng has arrived at Downing Street to meet Prime Minister Liz Truss. Kwarteng returned from the US ahead of schedule for urgent talks with Truss, as expectations grow that the government will scrap parts of its mini-budget to reassure markets. As we've been reporting, No 10 has declined to comment on reports by Times political editor Steven Swinford that Kwarteng is due to be sacked. |
|
