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That Tory party ‘doomsday cult’ September 28, 2022

Posted by WorldbyStorm in Uncategorized.
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Never thought I’d read this from this quarter, an analysis of the Tory ‘mini-budget’ (I see David McWilliams latest podcast also picked up on the phrase above).

Investors ‘inclined to regard Conservative Party as a doomsday cult’, says analyst

Investors seem inclined to regard the UK Conservative Party as a doomsday cult, according to Paul Donovan, chief economist of UBS Global Wealth Management.

In his morning comment, Donovan gives an absolutely blistering verdict on the government’s plans:

The global signals from the UK’s mini-budget matter. Modern monetary theory has been taken into a corner by the bond markets and beaten up. Advanced economy bond yields are not supposed to soar the way UK gilt yields rose.

This also reminds investors that modern politics produces parties that are more extreme than either the voter or the investor consensus. Investors seem inclined to regard the UK Conservative Party as a doomsday cult.

Tax cuts are unlikely to give the UK a meaningful medium-term boost (the supply constraints in the UK economy are more about health and education). A short-term “sugar high” is likely but may be limited. A high-income earner’s rational response would be to increase savings in anticipation of future tax increases.

That point about ‘modern politics producing parties that are more extreme than either the voter or the investor consensus’ is intriguing. Who could he be talking about? It would seem reasonable to suggest that these are parties of the right – the Republicans most obviously, but also similar manifestations across parts of Europe and indeed in Italy most recently. That the markets, or rather those who represent them in some imperfect fashion, have woken up to this aspect is interesting, but have they realised how damaging they are more broadly in economic terms? Perhaps they have. But markets are notoriously unable to be self-controlling, as we have seen time and again. Getting the message sure, but too late. 

Comments»

1. Blade Sprinter - September 28, 2022

I think we are all surprised at the shocking levels of competence and efficiency displayed by Truss and Kwarteng in ploughing the UK’s economy into the embankment.

The leadership contest and commentary were clear on the approaching calamity. Still, this exceeds even those expectations. Dramatically.

Rebuke from the IMF today. If you’ve lost UBS and IMF are you going to reverse your policies? If the UK has to go to the IMF it does suggest one of the requirements would be reversing policy. UK does appear remarkably isolated internationally.

Looking at the numbers being thrown around, how are these not the metrics and trends of a failed state?

If this is the level of insanity to be expected from Truss, what does this mean for Brexit negotiations? Can we expect rationality, good sense in any arena?

Level 5 Colm Meaney “Ah for Jaysus sake!”

Liked by 1 person

2. banjoagbeanjoe - September 28, 2022
3. Aonrud ⚘ - September 28, 2022

“Who Trusts the Thrust of Truss’s Thrift?”

(I could have been a sub-editor in a tabloid. Where did I go wrong…)

Liked by 1 person

4. sonofstan - September 28, 2022

They’ve f*cked it up, and big time, but I’m a little uncomfortable cheering on the markets and the IMF as the instruments of government downfall.

Liked by 4 people

Aonrud ⚘ - September 28, 2022

Fair point, and worth remembering in the schadenfreude who will suffer for their failings – Truss and Kwarteng are never going to struggle to pay their bills. That said, it makes fascinating watching.

Liked by 2 people

sonofstan - September 28, 2022

Truss is exposed though: said this already, but straight from the well

A former cabinet minister points out that just 50 Tory MPs backed Ms Truss as their first choice in the leadership race, so she doesn’t enjoy the well of support that Boris Johnson had.

https://www.bbc.co.uk/news/uk-politics-63066428

Liked by 1 person

5. roddy - September 28, 2022

Maung Zarni on twitter – “Truss “killed” the queen and is now trying to kill Sterling” ( accompanied by a photo of Truss shaking hands with HRH a couple of days before she kicked the bucket! )

Liked by 2 people

sonofstan - September 28, 2022

LibDem sleeper. Took Lenin a lot longer.

Liked by 1 person

6. Tomboktu - September 28, 2022

Liked by 1 person

7. sonofstan - September 29, 2022

BBC Radio Leeds this morning.
‘Where’ve you been?’

Like

sonofstan - September 29, 2022

They’ve actually edited that slightly: in answer to the first question, Truss replied ‘it’s great to be here on …..(long pause)….Radio, Radio Leeds’. I know she hates the place, but she could at least try….

Liked by 1 person


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