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No comment… September 26, 2022

Posted by WorldbyStorm in Uncategorized.

Never a good look when a currency plunges and a government won’t talk.

Liz Truss’s spokesman has declined to comment on today’s market moves, following the hammering given to UK government bonds this morning, and the pound’s slide to a record low overnight.

The spokesman said (via Reuters):

“The chancellor has made clear that he doesn’t comment on the movements around the market and that goes the same for the prime minister.”

The spokesman added there are no plans to make any changes to the measures set out in the so-called ‘mini-budget’ by chancellor Kwasi Kwarteng on Friday.

That may disappoint investors who were alarmed by the scale of the tax cuts in the mini-budget, and the surge in borrowing needed to pay for them (as Mohamed El-Erian explained this morning).


1. Gearóid Clár - September 27, 2022

I have friends and relations of friends who work in investment banking and private equity here in London. They’re all run ragged yesterday and Friday, working til the early hours.

Not saying that for sympathy for them – although some of them have young families – but just to indicate the total mess it’s making. Still, Kwasi is making a few of his friends extremely wealthier than they already were.

Liked by 1 person

WorldbyStorm - September 27, 2022

Absolutely. It’s an incredibly bad start though. In the Guardian the point was made that it was amateurish of him to mention more tax cuts at the weekend.


Aonrud ⚘ - September 27, 2022

Happy to have been introduced to the term “Moron Risk Premium” (MRP), which ‘markets’ are factoring in now. That’s always a good sign for a government.


2. Tomboktu - September 27, 2022

The IMF has waded in.

Fiscal measures adopted by Britain will probably increase inequality, a spokesperson for the International Monetary Fund said on Tuesday, urging UK authorities to consider providing more targeted support to affected families and businesses.

“We are closely monitoring recent economic developments in the UK and are engaged with the authorities,” the spokesperson said, in response to a query from Reuters after the British pound hit an all-time low amid spiking market concerns.
as reported on https://www.ft.com/content/e338f12e-edb0-4f31-9d04-0e75c5b2b78d

“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. “Furthermore, the nature of the UK measures will likely increase inequality.” reported on https://finance.yahoo.com/news/imf-says-uk-untargeted-fiscal-195219782.html

Liked by 1 person

Fergal - September 28, 2022

Since when do the imf ever care about equality?

Liked by 1 person

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