Well done to the Bank Of England for spending £60billion yesterday to stop the pensions collapse.
Sorry, future taxpayers, this one is on Truss.
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[Politics] Liz Truss **RESIGNS 20/10/2022**
- Thread starter Ethelwulf
- Start date
Sorry, future taxpayers, this one is on Truss.
I assume you voted for her leadership and are doubling down on how 'right' your choice was.
If so, perhaps better to cut your losses early and put it down to experience ?
Unless its a little bit less temporary.
But sure, there has been a slip and there would probably continue to be a slip as the war in Ukraine is very good for the US and not so good for Europe/UK. You could put anyone in charge and the outcome would have been the same: a hard and difficult winter. But there's no good reason to make it even more hard and difficult, and unless there's some great explanation that both the markets and the BOE and pretty much everyone else out there missed out on, the mini budget will make the inevitable problems more hard and difficult.
Thunder Bolt
Silly old bat
Truss and Kwarteng were co authors of this book in 2012. They intended to do exactly what they did last Friday.
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Basically, it's an excuse to cut back the majority of public expenditure which includes selling off the NHS.
But she's not doing anything different really, is she? She's putting forward a slightly different version of an economic approach that's been tried a couple of times before and failed spectacularly both times. That's part of why the markets got spooked. The other part is because they announced it in an absolutely cack-handed way (no OBR costings, only a partial of the full plan, etc) and basically said "we've said this is going to work, so believe us".
End result? Attempt #3 reached imminent disaster point in literally days, when attempts #1 and #2 took years to do it.
Correction: it was at or over $1.1260 immediately before the mini-budget. It spiked to $1.09 this morning but is now retreating back down to where it opened the day.
Conversely: the problem gilt yields went the wrong way (temporarily) off the back of Truss's interviews.
You're moving the goalposts a little bit here - no-one was talking about the long-term trend of Sterling and the Dollar. The very short-term status of this was started by you...
I, and others, were merely correcting that.
There is a huge difference in having to swallow a bitter pill to get the economy back from the abyss - as Thacher was forced to do to all of us, and forcing us all to have to swallow the pill after purposefully crashing an economy that was ticking along - as Truss has done. As for the long term - what about those people now suffering financial hardship ? What of those that will lose their homes ? I guess you'll tell them to 'stick it out - it will be great in the long term' ?
- Aug 8, 2005
- 26,704
Yes and I confirmed I quoted the wrong the number. You were right.
I just thought it was worth highlighting that slippage of the pound v dollar is not a new thing (as you will well know). Our Florida trip next year is getting more and more expensive!
Uh_huh_him
Well-known member
- Sep 28, 2011
- 11,155
A lot of Tory sympathisers are trying to make this comparison.
It's dangerous to compare the situations as Truss has far less to play with than Thatcher did.
Thatcher was buoyed by North Sea Gas and Privatisation revenues.
This pretty much funded all of her economic policy.
The family jewels have been sold and Truss is having to borrow £150bn before she even starts.
Thatcher was also a competent politician.
There are no similarities.
- Aug 8, 2005
- 26,704
I agree with that. And that is why NO ONE on either side of the argument can know whether they are right.
Agreed and I know, but you seemed to be trying to make a point that the £/$ exchange rate had been a positive outcome from the mini-budget when, unfortunately, it hasn't.
(We already found many things eye-wateringly expensive this summer. With Floridian sales tax coming into play, right now you'll essentially be worse off than £1=£1 parity when looking at quoted prices.)
Uh_huh_him
Well-known member
- Sep 28, 2011
- 11,155
Yeah I agree with that.
Personally I don't think a Prime minister should gamble the economy on a hunch.
I can't see any logic to borrowing big during a period of increasing interest rates, to give that money away to wealthy individuals.
If she's right, then Kudos, but she is increasingly on her own, in that view.
Going back to Liz's media rounds, BBC Bristol clearly had enough of her nonsense
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If anyone who isn't a millionaire will be able to go vacation in Florida next years, things will have gone very very well all things considered, so let's hope for an expensive trip for you guys.
You shouldn't look at GBP USD in isolation, especially in relation to what's happened in the last week. Here's a comparison chart showing GBP->USD and EUR->USD shifts over the last 12 months. Notice that both GBP and EUR have been sliding against the USD all year. But look at the very end of the chart. GBP had, in general, been more resilient than the EUR - right up until that "fiscal event" was announced, at which point GBP fell off a cliff relative to both EUR and USD. There is a clear and obvious impact there from the fiscal event.
So two stories here:
1. USD has been strengthening in general since March 2022, affecting pretty much all currencies.
2. UK Fiscal event last week, layered on top of the above trend, has sent the GBP down sharply.
The BoE has chucked £65 at the problem caused by this government. That is now a debt.
The price of food and goods has risen mainly due to the cost of fuel and electricity etc. There is an issue on shortages of products that has led to a rise in certain areas but mainly it's the cost of production and delivering the goods.
Fuel is taxed at over 50% then VAT added after that raising around £40b per year for the government. If they zero rated fuel for all companies in the UK (via tax rebates) and zero rated utilities this would have a dramatic effect on costs. This could be offset with a tax grab on the oil company's profits.
A simple way of reducing inflation.
We also as a nation need to stop wanting all things all the time and get back to seasonal variances in our food, those produced here. Bring back Buy British Products where the suppliers are given help through tax breaks.
Food waste in this country is down to many factors but a large one is over production. There's far too much choice as everyone demands everything grown worldwide to be available in our local supermarkets. We need to stop importing all this luxury stuff and get back to basics. Yes we need to import produce that is a staple in our food but do we really need exotic fruits from Africa?
The price of food and goods has risen mainly due to the cost of fuel and electricity etc. There is an issue on shortages of products that has led to a rise in certain areas but mainly it's the cost of production and delivering the goods.
Fuel is taxed at over 50% then VAT added after that raising around £40b per year for the government. If they zero rated fuel for all companies in the UK (via tax rebates) and zero rated utilities this would have a dramatic effect on costs. This could be offset with a tax grab on the oil company's profits.
A simple way of reducing inflation.
We also as a nation need to stop wanting all things all the time and get back to seasonal variances in our food, those produced here. Bring back Buy British Products where the suppliers are given help through tax breaks.
Food waste in this country is down to many factors but a large one is over production. There's far too much choice as everyone demands everything grown worldwide to be available in our local supermarkets. We need to stop importing all this luxury stuff and get back to basics. Yes we need to import produce that is a staple in our food but do we really need exotic fruits from Africa?