Senate The UK Politics discussion

A tax cut during high inflation. Genius.

 

It was a kamiKwasi budget.

 

It could only backfire if foreign investments in the UK were largely tied to its bond market, but really, what are the odds of that?

 

The pound hit new lies against the dollar over the weekend as Kwarteng announced the probability of more uncoated tax cuts in the not too distant future.


Market reaction to the "special economic event" has been negative to say the least.


We are in for some very bumpy times

Gone Mobile

 

And for the next trick: the explosion of interest rates on UK bonds. Interests on 5-year bonds were below 2% in July. They're reaching 4.5% today - with nearly half a percent increase just this morning.

 

Letters already going in apparently as more sensible conservatives are terrified she's going to tank the economy.

Utter chaos. She may not make it to Christmas at this rate

Gone Mobile

 

Segueing on this:



This is a disaster, to put it mildly...

 

I'm very tempted to put money on her being out by the end of the yeat

12 to 1 odds now, it was 20 to 1 this morning apparently

 

For relatively minimal investment and better yields, now is probably the time. Careful about what "her being out" is defined as.

 

For the less financially knowledgeable - ie me - the higher the interest on UK gilts, the worse things are?

 

It doesn't have immediately dangerous consequences, but it reflects the trust investors have in a country's ability to repay their debts. You demand higher interest in return for higher risk. When such rapid hikes occur, it shows an equally rapid degradation of trust in a country's ability to keep repaying interest.

 

Ah, of course, makes sense. Interest rate reflects risk and lack of confidence.

 

At least Bloomberg is putting it in the most basic way

 

The Pound floated back up based on the expectation of an urgent BoE intervention. Does nothing for the potentially brewing debt crisis, though.

 

Current predictions are that the pound will be below the dollar late October.

That's not dip below, but actually long term stable below.

If the bank of England raise rates it may be delayed to November.


Essentially, we have a government attempting to hammer the accelerator and bank which needs to put the handbrake on.



The only saving grace is that this bill still needs to be voted on.

There may be enough nervous MPs to either abstain or vote against. It's a given it'll be a whipped vote though which means they also have to be brave and there aren't a lot of backbones left in the Tory ranks

Gone Mobile

 

Genuine question: are there any Tory MP's that are worthy of even a modicum of respect?

 

I think they got rid of them all in the last couple of elections.

 

That will save me some money on a book I've been waiting on to buy (for unrelated reasons).

 

Accurate. For all their faults. Gaulke, Stewart, Soubry were the few sane people in a room of crazies and they were punted the minute May got in for being too antibrexity

 

The main reason why Truss went hard right was to secure the support of the majority of her party. Remember, she was moderate, pro-Europe until it suited her ambitions not to be.

She may be dumber than a bag of wet mice, but she's smart enough to know that the current crop of MPs are basically amoral, disaster capitalists. Even so, they will eat her on toast based on what we've seen so far, not least the plan to open up the UK to large scale immigration to temper chronic labour shortages. Brexiters are having aneurysms at the very thought.

 

The book itself will be less.

 

And the BoE decided not to do that emergency interest rise.

 

So at what point does crashing the pound for personal gain while being a MP cross into being treason?