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Cont: General UK Politics III - Dumb and Dumber

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Has any government ever got off to a worse start than Truss's? The markets have reacted, the analysts and pundits are utterly scathing ... is it actually possible Truss could be out before 2023? Meanwhile Labour are 17% ahead in the polls and plenty of Tory MPs must be ******** themselves.
 
GlennB said:
Has any government ever got off to a worse start than Truss's? The markets have reacted, the analysts and pundits are utterly scathing ... is it actually possible Truss could be out before 2023? Meanwhile Labour are 17% ahead in the polls and plenty of Tory MPs must be ******** themselves.
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Even her assassination of the Queen doesn't seem to have helped her!
 
From "The Knowledge" a newsletter I've signed up for at some point:

In the headlines​

“Spooked” lenders including Virgin Money have stopped offering mortgages to new customers, says The Daily Telegraph, amid fears the Bank of England will raise interest rates “to counter the turmoil facing the pound”. Traders predict rates will hit 6% next year, adding £800 to the typical monthly mortgage repayment. Labour has surged to its largest poll lead over the Tories since 2001. A new YouGov survey puts the opposition at 45%, 17 points ahead of the Conservatives on 28%.......
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ETA: Telegraph paywalled - here is a Bloomberg article with the same mortgage news:

https://www.bloomberg.com/news/arti...ull-mortgage-deals-with-uk-markets-in-turmoil
 
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You can't say Truss didn't warn you. She did promise to hit the ground from day one!

Quite what is being 'delivered', I don't know.
 

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Carrot Flower King said:
Oh, look - https://www.theguardian.com/news/20...s-avoiding-32bn-in-tax-each-year-report-finds - it appears that non-doms might not all sod off if told to pay some taxes...

Odd how those of us who were on PAYE never got any leeway nor choice about any of this.
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The argument never made any sense - someone claiming nom-dom is saying they don't intend to stay in the UK so they were going to sod off at some point anyway.

It's used simply because it is there.
 
Labour propose to create a nationalised green energy company.

Oh great, something else for the Tories to flog to their mates when they get back into power :mad:

To be clear, I'm in favour of Labour's proposal and think it will be a great success. I also think that as a result, the Tories will sell it off at the first opportunity for the lowest amount they can get away with.
 
The Don said:
According to this BBC commentator, Kwasi Kwarteng must U-turn on tax or cut spending.

https://www.bbc.co.uk/news/business-63049044

I think we all know what they would prefer to do :(
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The initial setting up of the OBR was a Conservative Party initiative in the first place, so it seems a bit suspicious it hasn't even looked at the costings yet. Note Kwarteng has deferred this report until 23 November - eight weeks time, when the fiscal situation might be in free fall and irreversible. His affirmation today that he is determined to change nothing indicates to me that the whole thing is a deliberate attempt to asset strip the UK and then say, hey, guys, meet the US Pharma who have offered to invest heavily in the NHS, now the Private Health Service and here's the plan for everybody to take out health care plans as we can no longer afford the NHS.

Let's see if I am not right.
 
The Don said:
Labour propose to create a nationalised green energy company.

Oh great, something else for the Tories to flog to their mates when they get back into power :mad:

To be clear, I'm in favour of Labour's proposal and think it will be a great success. I also think that as a result, the Tories will sell it off at the first opportunity for the lowest amount they can get away with.
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And renationalise the railways (don’t know if that’s is UK or England&Wales). That should take a few minutes once in power considering most of it has already been renationalised!
 
Darat said:
And renationalise the railways (don’t know if that’s is UK or England&Wales). That should take a few minutes once in power considering most of it has already been renationalised!
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Tht one's a doddle. Stop paying subsidies, shares then worth zero, buy them all at pennies on the pound.
 
According to a member of the (British) Labor Party Mr Kwartung is:


MP Rupa Huq says she has apologised to Chancellor Kwasi Kwarteng for describing him as "superficially" black.

Speaking at a Labour Party conference fringe event, Ms Huq also said: "If you hear him on the Today programme, you wouldn't know he's black."

Her remarks were criticised and Labour suspended her from the parliamentary party pending an investigation.
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https://www.bbc.com/news/uk-politics-63050482



This is the BBC report, others on the political right are leaping on this. The contrarians at Spiked for example have produced an editorial highlighting the kinds of language used to describe Truss's cabinet picks and pointing out just how racist it sounds.


What does it mean to be ‘superficially’ black? That’s a question we’ve all been forced to ponder this afternoon, in response to Labour MP Rupa Huq’s vile comments about Kwasi Kwarteng. At a fringe event at Labour Party conference yesterday, unfortunately titled ‘What’s next for Labour’s agenda on race?’, Huq apparently felt moved to hold forth on the question of just how black our British-Ghanaian Tory chancellor really is. ‘If you hear him on the Today programme you wouldn’t know he’s black’...
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https://www.spiked-online.com/2022/09/27/rupa-huq-and-the-grim-rise-of-woke-racism/
 
Graham2001 said:
According to a member of the (British) Labor Party Mr Kwartung is:





https://www.bbc.com/news/uk-politics-63050482



This is the BBC report, others on the political right are leaping on this. The contrarians at Spiked for example have produced an editorial highlighting the kinds of language used to describe Truss's cabinet picks and pointing out just how racist it sounds.





https://www.spiked-online.com/2022/09/27/rupa-huq-and-the-grim-rise-of-woke-racism/
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Incredibly crass thing for Huq to say. I think people who hang out with the political left do start to talk about Tories in scornful tones and I am guessing it was a political context in which Huq made her comments rather than a hate-fueled racist one. There is of course a class culture amongst South Asians which is worse than the British one so people like Braverman and Patel suck up to the ruling classes and kick down on those coming after them. Hence we see Braverman having a paddy over Truss wanting to invite immigrants from India to fill vacancies in exchange for a trade deal.
 
The IMF don't think that the UK Government's tax plans are a good idea:

The International Monetary Fund has openly criticised the UK government over its plan for tax cuts, warning that the measures are likely to fuel the cost-of-living crisis.

In an unusually outspoken statement, the IMF said the proposal was likely to increase inequality and add to pressures pushing up prices.
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https://www.bbc.co.uk/news/business-63051702

Naturally, the UK Government disagrees and is going "all in" on voodoo economics. :rolleyes:

Meanwhile, Lord Frost, the former Brexit minister and close ally of Prime Minister Liz Truss, criticised the IMF's statement.

He told the Daily Telegraph: "The IMF has consistently advocated highly conventional economic policies. It is following this approach that has produced years of slow growth and weak productivity.

"The only way forward for Britain is lower taxes, spending restraint, and significant economic reform."
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So the Bank of England has had to step in by buying up government bonds and gilts (these are to fund government borrowing, with a 'coupon' price representing the yield when the bond matures after a fixed period of time).

The Bank of England has announced that it will step in to calm markets after the government's tax-cutting plans sparked a fall in the pound and caused borrowing costs to surge.

It warned that if the market volatility continued there would be a "material risk to UK financial stability".

The Bank said it would buy government bonds on a temporary basis to help "restore orderly market conditions".
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BBC News

It probably had no choice but to act as the pension provider funds rely heavily on the gilt market. They are reported as being angry at being suddenly forced to sell off gilts in order to buy cheaper ones in order to stem the run on the pound reverberating on the stock markets causing the prices to crash. So if you were about to retire in the next couple of years or so and were looking forward to getting your 25% tax-free lump sum, you would have been pulling your hair out in despair as you watched the value of your pension pot plunge, thanks to Truss and Kwarteng.

It is a long-term thing so an increase in yield in the long-term will pay off but int he short term the brokers are selling them off like crazy.

Let's see if the Bank fo England will increase interest rates any time soon. Whilst it wants to be seen as supporting the government, ont he other hand it is its job to be independent and to act judiciously. Andrew Bailey seems to be quite timid in this respect, with his 'wait and see' attitude and diffidence in putting up the rate. He doesn't want to undermine the government but he has to put the country first.


Interesting times we live in. The DAILY MAIL is accusing the market traders of being unpatriotic by betting against the UK. Absolutely bonkers! So much for a Conservative Party fervent belief in the free market. Suddenly they are communists when it comes to losing votes.
 
Man on minimum wage can no longer afford to buy the home he wants.

Sales assistant Robin Price, who is on the minimum wage, has been saving up his mortgage deposit for years and thanks to that and an inheritance, is now ready to buy. But with the threat of a sharp rise in interest rates looming, he says he now feels completely lost.

"I just want a home," the 38-year-old told the BBC's 5 Live programme. He fears monthly mortgage repayments will become unaffordable to him just when he wanted to buy his own place.
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https://www.bbc.co.uk/news/business-63046919

While this is personally sad for him, I reckon he has dodged a bullet. Mortgage rates are at all time lows and are less than half the long term trend. If you can only afford a house with those interest rates, you cannot really afford a house IMO. :(
 
"Am told the BoE were responding to a “run dynamic” on pension funds - a wholesale equivalent of the run which destroyed Northern Rock.
Had they not intervened, there would have been mass insolvencies of pension funds by THIS AFTERNOON."

linky from Sky News
 
GlennB said:
"Am told the BoE were responding to a “run dynamic” on pension funds - a wholesale equivalent of the run which destroyed Northern Rock.
Had they not intervened, there would have been mass insolvencies of pension funds by THIS AFTERNOON."

linky
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Damn the BofE - that would have provided so much opportunity for growth - buying assets at knocked down prices!
 
In case there is any doubt about the fact that it is UK Government policy which is causing the crisis....

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.
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https://www.bbc.co.uk/news/business-63065413

Oh joy :rolleyes:
 
Vixen said:
So the Bank of England has had to step in by buying up government bonds and gilts (these are to fund government borrowing, with a 'coupon' price representing the yield when the bond matures after a fixed period of time).

BBC News

It probably had no choice but to act as the pension provider funds rely heavily on the gilt market. They are reported as being angry at being suddenly forced to sell off gilts in order to buy cheaper ones in order to stem the run on the pound reverberating on the stock markets causing the prices to crash. So if you were about to retire in the next couple of years or so and were looking forward to getting your 25% tax-free lump sum, you would have been pulling your hair out in despair as you watched the value of your pension pot plunge, thanks to Truss and Kwarteng.

It is a long-term thing so an increase in yield in the long-term will pay off but int he short term the brokers are selling them off like crazy.

Let's see if the Bank fo England will increase interest rates any time soon. Whilst it wants to be seen as supporting the government, ont he other hand it is its job to be independent and to act judiciously. Andrew Bailey seems to be quite timid in this respect, with his 'wait and see' attitude and diffidence in putting up the rate. He doesn't want to undermine the government but he has to put the country first.


Interesting times we live in. The DAILY MAIL is accusing the market traders of being unpatriotic by betting against the UK. Absolutely bonkers! So much for a Conservative Party fervent belief in the free market. Suddenly they are communists when it comes to losing votes.
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So... they're doing Quantitative Easing during a time of high inflation, and cutting taxes.... I'm seeing the GBP falling to about 50 US cents here pretty soon.
 
I see that Truss is "standing by Kwarteng". He's toast, then.
 
GlennB said:
I see that Truss is "standing by Kwarteng". He's toast, then.
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I wonder if he will quit - in effect allowing Truss to claim it's all his fault, or be fired and allow Truss to claim that she is decisive. :rolleyes:

As long as the policies are abandoned, I couldn't care less about the humans.
 
The Don said:
Man on minimum wage can no longer afford to buy the home he wants.



https://www.bbc.co.uk/news/business-63046919

While this is personally sad for him, I reckon he has dodged a bullet. Mortgage rates are at all time lows and are less than half the long term trend. If you can only afford a house with those interest rates, you cannot really afford a house IMO. :(
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His big problems are:

  • being single
  • being on minimum wage / low paid
  • expecting to be a first-time buyer in London.


Back in the day, whilst interest rates did indeed go up to 15% (but only for one day; it soon dropped back to 10%) in the '90's, prior to that (going backto the seventies and eighties) the average mortgage applicant was only expected to show their earnings as apx 3:1 the value of the property. Nowadays, whilst interest rates have been very low (<2%) OTOH mortgage providers now expect up to five times one's salary minimum, on the assumption you are in a partnership, and thus able to afford the average high house prices today. This assumption immediately makes it hard for a single person or someone who doesn't want to share. In addition, even if he had the requisite deposit, his earnings wouldn't buy him anywhere in London, with the housing market there grossly overpriced IMO. Renting won't help this chap as rents will rise along with mortgages to meet the landlords' costs. This chap is better off finding a place near Norfolk whilst there are gains to be made on stamp duty and sit it out.

According to the link:

The Resolution Foundation think tank said on Monday that for a homeowner with a £140,000 mortgage, rates rising to 5% could mean monthly payments going up by about £190, relative to rates staying at 2.25%.

Interest rates of 6% could push a typical mortgage payment up by another £80 a month, the foundation said.
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ibid

So, he'll need to ensure he can cope with an extra £190 pcm on a mortgage, together with another £100 pcm...£200 pcm...? extra on energy bills in the coming years, on top of that. Otherwise it is back to living with Mum and Dad for many younger people.
 
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GlennB said:
"Am told the BoE were responding to a “run dynamic” on pension funds - a wholesale equivalent of the run which destroyed Northern Rock.
Had they not intervened, there would have been mass insolvencies of pension funds by THIS AFTERNOON."

linky from Sky News
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I am really worried about this. The whole thing could collapse overnight. People can't really take it all out without big tax penalties either. Sure, there is a government scheme to protect your pension pot from going bust but that only pays a fraction of its true value.

This happened with one of my pension funds some years ago.
 
lobosrul5 said:
So... they're doing Quantitative Easing during a time of high inflation, and cutting taxes.... I'm seeing the GBP falling to about 50 US cents here pretty soon.
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Also known as, Russian roulette or casino gambling. Just chuck everything onto the red square and hope for the best.
 
The Don said:
I wonder if he will quit - in effect allowing Truss to claim it's all his fault, or be fired and allow Truss to claim that she is decisive. :rolleyes:

As long as the policies are abandoned, I couldn't care less about the humans.
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Humans, maybe. Humanity, not so much
 
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