UK Politics Thread part II

[Jimbuna]

The Bank of England confirms its emergency bond-buying scheme will close this Friday, in spite of reports that it was considering extending the programme.

A spokesman for the Bank says: "As the Bank has made clear from the outset, its temporary and targeted purchases of gilts [government bonds] will end on 14 October.

"The governor confirmed this position yesterday and it has been made absolutely clear in contact with the banks at senior levels."

It adds that other measures taken over recent days will be in place after 14 October "to ease liquidity pressures on LDIs (liability driven investments)".

[Jimbuna]

[Jimbuna]

Liz Truss is coming under more pressure from some of her own MPs to rethink the tax cuts announced in last month's mini-budget.

Conservative Home's Paul Goodman also says MPs are considering alternatives to Truss as leader.

Foreign Secretary James Cleverly says Truss is sticking with her plan, and removing her as PM would be disastrous.

The PM's strategy was criticised when she attended a meeting of Tory backbenchers last night.

One MP accused her of wrecking 10 years of Conservative policies aimed at helping working people.

Truss has repeatedly defended the proposed tax cuts, funded by borrowing, outlined last month.

During PMQs on Wednesday, she also pledged not to make any cuts to public spending.

[Moonlight]

Truss confirms new tax U-turn and insists she will stay on as PM

https://www.bbc.co.uk/news/live/uk-politics-63221738

Be in no doubt, the prime minister is in deep trouble | Beth Rigby

https://www.msn.com/en-gb/news/uknew...2791f364c64a3c

Jesus Christ! where do the Tories get these muppets from, appointing Jeremy Hunt as Treasury Minister is the dumbest move Truss has made so far, "The Thickest Man To Ever Wear A Suit" who single handedly devastated the NHS is now in charge of the British economy, Liz Truss you're on your way out, you're in way over your head and this latest appointment just confirms it.

Rishi Sunak is waiting in the wings ready to pick up the pieces and, I expect him to announce Penny Mordaunt as his Deputy Prime Minister or something similar, this is what should have happened in the first place.

[Catfish]

So she fired her finance minister because he is such a good friend?

[Jimbuna]

What an absolute mess!!

[Jimbuna]

Liz Truss asked why she should stay on as PM

https://www.bbc.co.uk/news/av/uk-politics-63261560

[Jimbuna]

Difficult decisions will be needed "across the board" on tax and spending, the new chancellor has told the BBC.

Speaking in his first interviews since becoming chancellor, Jeremy Hunt said some taxes will go up, while government spending may need to fall.

Cutting the top rate of tax and not independently costing measures were mistakes being "put right", he added.

He also insisted he had a "clean slate" after Liz Truss sacked Kwasi Kwarteng on Friday.

Mr Hunt, a former foreign secretary who had not been part of Ms Truss's cabinet, was made chancellor on Friday as the prime minister sought to restore confidence in her government.

In another dramatic day in Westminster, the PM also scrapped the plan to freeze corporation tax - set out in the 23 September mini-budget - in another major U-turn.

Speaking to the BBC, Mr Hunt signalled a big shift away from the economic policies of Ms Truss and Mr Kwarteng.

"Taxes are not going to come down by as much as people hoped, and some taxes will have to go up," he said. "I'm going to be asking all government departments to find additional efficiency savings."

While he did not say where taxes could rise or public spending be reduced, Mr Hunt did not rule out cuts to NHS spending or rowing back on Ms Truss's pledge to increase defence spending to 3% of GDP.

The chancellor, a Rishi Sunak supporter in the leadership contest, said the government needed to "show the world we have a plan that adds up financially".
https://www.bbc.co.uk/news/uk-63268238

[Jimbuna]

Mini-budget will likely mean higher interest rates, warns Bank of England governor

UK borrowers can expect to face higher interest rates as a result of the Truss government’s tax and spending decisions during its six weeks in power, the governor of the Bank of England has warned.

Despite the U-turn on corporation tax on Friday that saw the sacking of Kwasi Kwarteng as chancellor, Andrew Bailey said the extra stimulus provided in last month’s mini-budget would add to inflation and force the Bank into tougher-than-expected action.

Bailey said he had impressed on the new chancellor, Jeremy Hunt, the need for the public finances to be sustainable and that there had been a “clear and immediate meeting of minds”. Hunt used his first interview to stress mistakes made by Truss would require “difficult decisions” to be made.

The governor said it was not for him to “constrain the choices” Hunt will make in his fiscal statement on 31 October, and said the decision to go ahead with the planned increase in corporation tax was “important”.

Even so, Bailey made clear that tough action from the Bank on borrowing costs could be expected in early November.

[Skybird]

Wanting to be a second Thatcher, is one thing. Actually being a second Thatcher is something very different.

Kwarteng gone. Truss next to leave, I assume? Or should I say: next to be made leaving?

Truth being told however, the situation any politican would find himself in when heading a British government now, is a lost position currently. Its all so messy now that practically everybody must fail.

There is a fever in the world now, and I think we need to let it run because we are unable to stop it. When it ebbs down again one day, the world will be another one - to what degree, remains to be seen.

But right now, Britian, EU, ECB, the West, everything: its beyond control. The means to control it, are not there. The crisis (plural) have grown over our heads.

[Gorpet]

Well the destruction of the conservative party is in full swing in your country.Liz Truss the sacrificial lamb. Now she knows! Markets determine,Who will be a PM and stay in office or get a boot. Damn she just proposed a different approach , nothing put into effect and she has been destroyed. And i thought the USA was in trouble. Then again your just an Island that is fast running out of Englishmen.

[Skybird]

She was not yet thrown out of the door, but she was handed her coat. the Neue Zürcher Zeitung comments:
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The new British Chancellor of the Exchequer clears away the last remnants of his boss's political program

Failed British Prime Minister Liz Truss may still be holding on to office, but she has lost her authority. Her new Chancellor of the Exchequer is giving clear signals about reassuring the capital market - and thus burying Truss's political program.

He is the British gentleman the world likes to imagine: Perfectly groomed in a dark suit, calm and controlled, with a soft voice and friendly expression, the new Chancellor of the Exchequer Jeremy Hunt cleared away the last remnants of his boss Liz Truss' political program on Sunday morning. "This is a compassionate Conservative government," he declared on the BBC's main political morning show.

That was exactly the guiding principle of the Conservative governments of the last twelve years, from which Truss wanted to distinguish herself so radically with her reform program to return the country to more dynamic economic growth. The sophisticated Chancellor of the Exchequer, who supposedly rushed to the Prime Minister's rescue, dealt a death blow to her ambitions.

Truss's dismissal of Chancellor of the Exchequer Kwasi Kwarteng and the abandonment of tax cuts for companies on Friday had not yet really managed to calm the financial markets. The British pound even weakened somewhat after the announcements, and the all-important interest rates for 30-year government bonds (gilts) rose again slightly to a high 4.6 percent. The muted reaction left open the interpretation that the announcements were not enough. Hunt had to double down to defuse the situation when the market opened Monday morning. And he did it without regard for his new boss.

Taxes would not fall as quickly as previously thought, and some might even rise, he explained. In addition, all ministries would have to come up with austerity proposals, but no austerity policies as harsh as those the first Conservative government had had to implement from 2010 onward after the financial crisis were planned, he said. Hunt promised financial market participants the greatest possible transparency about the government's fiscal policy plans, thereby also taking a counter-position to his predecessor, who failed in record time.

He warned citizens of the need to make tough decisions. At the same time, however, he assured them that the poorest would be protected and that the government would do everything possible to keep the rise in mortgage rates as low as possible.

This is precisely the prioritization that many economists are now demanding of the British government. The irresponsible debt policies of Kwarteng and Truss had driven up the already rising interest rates on government debt by leaps and bounds. This forced the Bank of England to make short-term support purchases of government bonds at the wrong time, as these had the additional effect of driving up inflation instead of dampening it. In addition, rising mortgage rates are weighing on the disposable incomes of millions of households already suffering from high inflation of 10 percent. Hunt recognized this and initiated the necessary corrections.

However, many are asking what will be the vision of the government, which is only five weeks old, apart from troubleshooting. Hunt took pains to reiterate the prime minister's goals: stronger long-term growth. But no chancellor of the exchequer or prime minister would ever promise otherwise. How this goal is to be achieved is completely unclear apart from airy declarations of intent such as a more efficient bureaucracy or more successful research and development.

That leads to the question of what purpose is left in holding on to Truss, who has lost everything she used to campaign for her election as party leader in the summer. The party is split over that, which buys Truss some more time. A strong wing around her one-time rival for the party leadership, former Chancellor of the Exchequer Rishi Sunak, is pushing for a quick replacement of Truss. This faction could live well with a Chancellor of the Exchequer Hunt and would pursue a similarly moderate course for the party that somehow takes all interests into account.

Truss's predecessor, Boris Johnson, who was ousted in the summer, had made it clear when he resigned that he would seek a return to Downing Street. But at the moment, this does not seem to be his most pressing concern, and he would hardly have the support of the parliamentary party. Hardly anyone is still in favor of Truss. But many MPs still balk at the prospect of another lengthy procedure for electing party leaders.

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[Jimbuna]

Chancellor Jeremy Hunt has insisted Liz Truss is still in charge of the government, after a series of U-turns left her premiership in jeopardy.

Some Tory backbenchers have been talking privately about how to remove the PM, after market turmoil led her to abandon her flagship tax policies.

Mr Hunt urged the party to unite behind her, as the pair held crunch talks to thrash out plans on tax and spending.

But a senior Tory MP said "the game is up" and called for Ms Truss to go.

Mr Hunt replaced Kwasi Kwarteng on Friday, after the former chancellor was fired following financial turbulence in the wake of last month's mini-budget and a backlash from a number of MPs in his party.

A key test of the government's moves so far will come when markets reopen early on Monday, with ministers facing a nervous wait to see if the rise in UK government debt costs over recent weeks continues.
https://www.bbc.co.uk/news/uk-politics-63275544

[Jimbuna]

Nothing beats a millionaire denying the working masses the help they most clearly need atm.

Truss wormed her way into the PM job by making promises she must have realised she couldn't pay for and here is her latest Chancellor taking them all back.

This country needs an immediate General Election.

[Jimbuna]

Chancellor Jeremy Hunt ditches almost all of PM Liz Truss's tax cuts announced in the government's mini-budget three weeks ago.

The basic rate of income tax will remain at 20p indefinitely - instead of being reduced to 19p

The cap on energy prices charged to households is now only guaranteed until April next year, but will then be reviewed.

But the cuts to stamp duty and National Insurance remain in place.

Hunt says his announcement - bringing forward measures from an economic plan on 31 October - is designed to calm financial turmoil following the mini-budget.

He will address MPs in the House of Commons at 15.30 and give further details.

Truss has been meeting cabinet ministers as she attempts to shore up her premiership, following calls from some Tory MPs for her to go.