Rip pound sterling

[Icecream Snow 761]

Pretty horrific, but unsurprising 

 

[Well b back 3,201]

On 30/09/2022 at 21:20, Van wink said:

Appears they are getting advice that wholesale price of gas is likely to drop considerably more than expected, could make significant reduction in the cost of the bailout and hence overall cost of the "mini budget", maybe they are hoping for this to firm up before OBR report is published, could make significant difference to the opinion.

I see they were giving advice as well on how to make the most of their new uncapped bonuses.

I appreciate it probably wasn’t quite as pictured, but only a complete f****** idiot would leave his opponents with such an open goal.

[Van wink 2,994]

8 hours ago, Well b back said:

I see they were giving advice as well on how to make the most of their new uncapped bonuses.

I appreciate it probably wasn’t quite as pictured, but only a complete f****** idiot would leave his opponents with such an open goal.

I am struggling to remember such an open goal being presented, particularly when we know massive public spending and benefit cuts are going to follow, she clearly didnt want to make the two announcements together and by doing it separately she will get slaughtered twice. 

[benchwarmer 625]

Whether Kwarteng disclosed anything confidential or not, it looks absolutely terrible and shows an alarming lack of political judgement.

 

Edited October 2, 2022 by benchwarmer

[1902 1,167]

Kwarteng is toast. Truss threw him under the bus already today over top tax rate. She is keeping him to fire after his spending review when she is forced to backtrack by her own MPs.

Not sure that will save her tbh, but I'm also not sure that the Conservatives could afford another leadership contest and a second prime minister with dramatically different policies.

I thought it was worrying for them when she had no real honeymoon period bounce, she came in with such low stock it was always going to be hard, but by now she isn't going to regain popularity unless something really dramatic happens. Additionally, half her party despise her including most of the bigger hitters.

Tories are politically in the absolute pits right now and I can't see how they can pull it back in the next two years given that it will take them a fair few months to get their house in order.

[littleyellowbirdie 2,543]

I heard this morning that one Labour MP had a message from a Conservative backbencher expressing a hope that Labour win the next elction. 

[Indy 3,297]

27 minutes ago, benchwarmer said:

Whether Kwarteng disclosed anything confidential or not, it looks absolutely terrible and shows an alarming lack of political judgement.

 

Unfortunately I don’t believe it is misjudgment, but they’re so personally driven for personal gain and looking after their friends in safe knowledge that they’re untouchable, just look at Covid contracts and the wasted billions……it’s the conservative way! Their new slogan.

[Indy 3,297]

21 minutes ago, 1902 said:

Kwarteng is toast. Truss threw him under the bus already today over top tax rate. She is keeping him to fire after his spending review when she is forced to backtrack by her own MPs.

Not sure that will save her tbh, but I'm also not sure that the Conservatives could afford another leadership contest and a second prime minister with dramatically different policies.

I thought it was worrying for them when she had no real honeymoon period bounce, she came in with such low stock it was always going to be hard, but by now she isn't going to regain popularity unless something really dramatic happens. Additionally, half her party despise her including most of the bigger hitters.

Tories are politically in the absolute pits right now and I can't see how they can pull it back in the next two years given that it will take them a fair few months to get their house in order.

The real problem is we have a very tricky global situation with the ongoing war, right wing government movements in Italy & Sweden, and now mid term elections with Biden appearing to be slipping in his popularity too. So who knows how these old self obsessed leaders will react and what they’ll do to hold leadership! Trump and Johnson showed theirs no integrity in politics at the top!

[KernowCanary 214]

Good to see petrol costs going down at the local Tesco. It’s also good to see someone has some sense instead of making the CEOs richer.

Edited October 2, 2022 by KernowCanary

[1902 1,167]

30 minutes ago, Indy said:

The real problem is we have a very tricky global situation with the ongoing war, right wing government movements in Italy & Sweden, and now mid term elections with Biden appearing to be slipping in his popularity too. So who knows how these old self obsessed leaders will react and what they’ll do to hold leadership! Trump and Johnson showed theirs no integrity in politics at the top!

Well, I suspect Brazil will give us a glimpse of how the populist right react to a lost election in the next few days. If that goes to a runoff then all bets are off over what Bolsonaro will do to avoid his almost inevitable defeat.

[benchwarmer 625]

2 hours ago, Indy said:

Unfortunately I don’t believe it is misjudgment, but they’re so personally driven for personal gain and looking after their friends in safe knowledge that they’re untouchable, just look at Covid contracts and the wasted billions……it’s the conservative way! Their new slogan.

This unholy mess isn't just about Truss/Kwarteng or even Johnson.  It can be traced back to 2016 when Cameron called a referendum he thought he couldn't possibly lose.  Like a drunk leaving a party who heads off in the wrong direction, every subsequent twist and turn has only made it worse.  The only solution is to retrace our steps.

 

Edited October 2, 2022 by benchwarmer

[keelansgrandad 6,679]

6 hours ago, littleyellowbirdie said:

I heard this morning that one Labour MP had a message from a Conservative backbencher expressing a hope that Labour win the next elction. 

Johnson?

[horsefly 4,297]

9 hours ago, littleyellowbirdie said:

I heard this morning that one Labour MP had a message from a Conservative backbencher expressing a hope that Labour win the next elction. 

Probably one of those Northern Tory MPs who wants to be sure there will still be benefits to claim when he's booted out of his seat.

[canarydan23 4,060]

U-turn on the 45p tax rate cut.

Pound jumps.

But remember kids, the two aren't related, markets are volatile everywhere 🤣

[Well b back 3,201]

20 minutes ago, canarydan23 said:

U-turn on the 45p tax rate cut.

Pound jumps.

But remember kids, the two aren't related, markets are volatile everywhere 🤣

Indeed made a few people, including people on here that stressed it was world events look a bit silly. Gilts still high though, so the overall problem hasn’t gone away even short term.

A spend of 65 billion by the BOE just to get the pound back to where it was before crazy Friday.

[horsefly 4,297]

We should be absolutely clear, the government is not saying the idea of reducing the top-rate of tax was wrong or a mistake, but a mere  "distraction". Truss, Kami-Kwasi, and their lackies are still wedded to the idea that it is sane to borrow money for tax-cuts for the rich. This bunch of gangsters remain an incompetent, immoral, disingenuous mob of buffoons.

[Capt. Pants 4,225]

24 minutes ago, Well b back said:

Indeed made a few people, including people on here that stressed it was world events look a bit silly. Gilts still high though, so the overall problem hasn’t gone away even short term.

A spend of 65 billion by the BOE just to get the pound back to where it was before crazy Friday.

Which of course will be ultimately underwritten by the taxpayer?

This is an unmitigated shambles. 

 

[ricardo 7,384]

53 minutes ago, Well b back said:

 

A spend of 65 billion by the BOE just to get the pound back to where it was before crazy Friday.

Er no, a threat to spend 5 billion a week for 13 weeks if needed.

Quid up against all currencies  this morning. Generally  there has been a bit of pull back against the dollar by both the quid and the Euro.

YF may need to have a word with his broker.

[canarydan23 4,060]

1 hour ago, Well b back said:

A spend of 65 billion by the BOE just to get the pound back to where it was before crazy Friday.

And, as we're seeing, completely unavoidable had Truss and Kwarteng shown an economic level of understanding on parity with even the most simple of simpletons. When pre-teenage children can show more economic foresight than the Prime Minister and Chancellor of the Exchequer, we know we're in deep trouble.

[Yellow Fever 3,767]

43 minutes ago, ricardo said:

Er no, a threat to spend 5 billion a week for 13 weeks if needed.

Quid up against all currencies  this morning. Generally  there has been a bit of pull back against the dollar by both the quid and the Euro.

YF may need to have a word with his broker.

Don't worry Ricardo - with this government calamity is like busses- they'll be another along soon.

Last summer I pocketed £40K in holding on to my dollars from what I had originally thought they were worth earlier in the year. Sold out at 1.19. Should have waited a few more months and could of doubled that but then nobody could of really predicted how inept Truss would be.

Anyway, I raise a glass to the Brexiteers - literally not the full shilling it seems 😉

 

[Well b back 3,201]

30 minutes ago, ricardo said:

Er no, a threat to spend 5 billion a week for 13 weeks if needed.

Quid up against all currencies  this morning. Generally  there has been a bit of pull back against the dollar by both the quid and the Euro.

YF may need to have a word with his broker.

So you are ignoring your other points the FTSE and Gilts. Our problems stepped up a gear after that Friday and at that point were nothing to with anything other than the incompetence of certain members of this Government. Just like Truss through the chancellor under a bus yesterday, he in turn has thrown those under a bus that said it was nothing to do with his mini budget.

Clearly the drop in the pound was due to last Friday, and the recovery was more to do with the BOE buying up our debt. £65 billion and you would expect it not just to recover to where it was, but begin to get back to where it was before we ever heard the words Truss for leader. 
The biggest problem for the type of Politics that we had was a good 60% of the population took it in, ie 1 good thing was much better than 20 bad things. To get to those scenarios took misleading information, others will say deliberate lies. In the U.K. Johnson and Truss have changed those believes, I would now say 80% question anything said, and it has gone to the other extreme where even if the info is accurate a majority do not believe it. 
Yet to come in the short terms are likely blackouts, cuts to the poorest, cuts to the NHS and the possibility of a national strike.

I voted ( as I have always done ) for this party and my particular MP. These are not Policies I voted for, call a general election now and let us decide if the pound has recovered or we want interest rates and inflation to carry on increasing.

[Well b back 3,201]

Don’t worry they have a plan, the Chancellor just does not know what it is yet.
Kwarteng fails to rule out further U-turns after humiliating 45p tax cut reversal

 

Kwasi Kwarteng failed to rule out further U-turns after reversing his plan to abolish the top rate of income tax.

The Chancellor was forced to issue a statement acknowledging it was not a good look to cut the 45p tax rate for people earning £150,000 or more, after a backlash from within his own party.

Speaking on LBC's Nick Ferrari at Breakfast, just after the statement was made, the Chancellor was asked three times if he planned any other U-turns.

 

I've said what I've said about the 45p rate and I'm totally focused on delivering the growth plan, on delivering the energy intervention or making sure that the 1p reduction in the basic rate continues.

"And we're totally focused on the growth plan."

Asked the third time if there would be more U-turns, he repeated: "We're totally focused on the growth plan."

"Why wont you say no more U-turns?" Nick asked.

"We're totally focused on the growth plan," he said again, referring to the tax cutting mini-budget he announced that he and Liz Truss have insisted will allow the economy to expand.

Along with other reforms like abolishing the cap on banker's bonuses, Mr Kwarteng had hoped to scrap the highest income tax bracket in a bit to stimulate growth.

But the market reaction was terrible, with the pound tumbling against the dollar and the Bank of England having to buy up £65bn of Government bonds to ensure some pension funds would not be at risk of collapsing.

 

After the Government argued there were global factors at play in the economic turbulence, Ms Truss finally admitted the communication could have been better ahead of the mini-budget.

She also shifted blame to the Chancellor for adding the idea to cut the top rate of income tax.

The issue overshadowed the opening of the Tory conference in Birmingham, with Michael Gove criticising the tax rate's planned abolition before Mr Kwarteng announced his U-turn.

Mr Kwarteng said in a statement on Monday: "From supporting British businesses to lowering the tax burden for the lowest paid, our growth plan sets out a new approach for a prosperous economy," he said in a statement on Monday morning.

"However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

"As a result, I am announcing we are not proceeding with the abolition of the 45p tax rate.

"We get it, and we have listened. This will allow us to focus on delivering major parts of our growth package."

That came despite him being due to insisting his mini-budget was the "right thing to do" and the Tories must "stay the course".

 

The pound bounced back to levels seen before the Government's controversial mini-budget after the U-turn.

Sterling went to 1.13 US dollars at one stage overnight, recovering ground lost in the turmoil that followed the mini-budget announcement, but it pared back some of the gains in early morning trading to stand at 1.12.

 

[Barbe bleu 823]

1 hour ago, canarydan23 said:

And, as we're seeing, completely unavoidable had Truss and Kwarteng shown an economic level of understanding on parity with even the most simple of simpletons. When pre-teenage children can show more economic foresight than the Prime Minister and Chancellor of the Exchequer, we know we're in deep trouble.

For the sake of discussion  i'm going to offer a counterpoint to the prevailing narrative here

The cut in the 45% rate is all they have pulled back from. That rate raised only £2billion.  The total announced tax cuts were estimated at £45 billion.  In other words over 95% of the tax cuts remain in place.

The 45% controversy is more about fairness than anything else. Did it really have much impact on the markets either way?.  And should short term market changes should be of national concern in any event ?

The issue was the amount  of debt being accrued. Has today's announcement really done much to alleviate that.  ?

And by keeping the 45% rate the government might have undermined the rest of their strategy to attract and retain the higher earners/high earning companies to the UK and failed to free up cash for investment.

Edited October 3, 2022 by Barbe bleu

[Well b back 3,201]

3 minutes ago, Barbe bleu said:

The cut in the 45% rate is all they have pulled back from. That rate raised only £2billion.  The total announced tax cuts were estimated at £45 billion.  In other words over 95% of the tax cuts remain in place.

The 45% controversy is more about fairness than anything else. I doubt it really had much impact on the markets either way.  And I'm not sure short term market changes should be of national concern anyway

 

See above BB now not denying there will be more U turns.

 

[ricardo 7,384]

42 minutes ago, Yellow Fever said:

Don't worry Ricardo - with this government calamity is like busses- they'll be another along soon.

Last summer I pocketed £40K in holding on to my dollars from what I had originally thought they were worth earlier in the year. Sold out at 1.19. Should have waited a few more months and could of doubled that but then nobody could of really predicted how inept Truss would be.

Anyway, I raise a glass to the Brexiteers - literally not the full shilling it seems 😉

 

Good to hear.

I was getting a bit concerned that we might have to send a collection round but seems you are in a decent financial state. Dabbling in the FX markets can often lead to jumping from a high building.👍

[keelansgrandad 6,679]

1 minute ago, ricardo said:

Good to hear.

I was getting a bit concerned that we might have to send a collection round but seems you are in a decent financial state. Dabbling in the FX markets can often lead to jumping from a high building.👍

Have they still got that blanket at Carrow Road? Or do they come round with a card machine now?

[ricardo 7,384]

1 minute ago, keelansgrandad said:

Have they still got that blanket at Carrow Road? Or do they come round with a card machine now?

I must confess that when my dad gave me 2 bob to chuck in the blanket I did consider how many Mars Bars I could buy with it, but in the end I did the right thing.😉

[keelansgrandad 6,679]

1 minute ago, ricardo said:

I must confess that when my dad gave me 2 bob to chuck in the blanket I did consider how many Mars Bars I could buy with it, but in the end I did the right thing.😉

That was a politician's ending. I did the right thing. What you bought a Mars Bar and threw a shilling in?

[sonyc 5,511]

56 minutes ago, Well b back said:

Yet to come in the short terms are likely blackouts,

This has been mooted by several industry experts actually ...UNLESS we reduce our national consumption to protect reserves. I wish I could find the main source I'm referring to. Yet the conviction with which she talked about our need to pull back on use made me more convinced. Mostly, because it was not made by someone with any political point to prove. 

Truss would be better advised to ask residents to save on their consumption. I think actually most of us are (thereby making our own impact anyway) but strong messaging would be more assuring and the smart thing to do.

Compare the UK response to that of France - they've had a tariff shield (€0.068 EDF) instead of 35% increases since February. They are asking all residents to try and reduce consumption by 10% and also state that "the best energy is that which we do not consume". 

Such a contrast I think in approaches to energy. Truss just bleats about Russia. It's valid to do so but you need also to actually have a strategy to tackle it. Huge borrowing and trickle down economics based on a gung ho growth policy seems to be her way. Even allowing oneself to put aside one's own prejudices about that approach is it really the right time to be doing this?

A blackout will be another nail in her coffin. Literally, lights out. 

Edited October 3, 2022 by sonyc

[ricardo 7,384]

1 minute ago, keelansgrandad said:

That was a politician's ending. I did the right thing. What you bought a Mars Bar and threw a shilling in?

An early moral dilema, the first of many.👍