The Conservative Party/Government

[bluethrunthru]

 

[Chippy_boy]

Changing the BoE’s remit now would obviously lead to a rout across the market (I know you’re not advocating changing it right now), so we’re stuck in a bad situation for the foreseeable future.

The problem at the moment is that the government is pushing ahead with a radical fiscal package at the same time as the BoE is facing unprecedented uncertainty as to how and when to unwind QE. The question of how to unwind QE has hung over the market for years - not just in relation to the UK - and most thought it would occur only when fiscal surpluses are being recorded, or at least small deficits, such that the supply of gilts (normal issuance and those sold from the APF) would not overwhelm the market. Obviously that isn’t happening now, and I was surprised that the government pushed ahead with the tax cuts so soon after underwriting utility bills, the cost of which is in theory open ended. I’m not against tax cuts per se, but the timing was wrong in my book.

The other protagonist in this is of course the BoE, which got itself behind the curve in terms of rates, and which is now pushing ahead with large hikes to try to regain credibility. These rate hikes obviously dictate the fiscal outlook via the APF, so both fiscal and monetary policies are in flux and aggravating each other, causing the bigger market reaction. I would think that the BoE is extremely happy with the events of the past week as they’ll be absolved of most of the blame, when in fact they should be coming under severe scrutiny.

Great post - absolutely spot on.

 

[mat]

Kwartang already hiding from the media over the shitshow he's created.

He's accountable to us not the hedgefund owners he's sucking off.

 

[Chippy_boy]

View attachment 56663
Obviously his knowledge on such matters is dwarfed by your expertise .

Fuck all to do with expertise mate. It was about his rather naff, inappropriate and IMO politically motivated commentary.

 

[Alan Harper's Tash]

Fuck all to do with expertise mate. It was about his rather naff, inappropriate and IMO politically motivated commentary.

Unlike yours, of course… ;-)

 

[Chippy_boy]

Well who'd have thought it. The pound now higher against the dollar now (1.0899) than prior to the mini budget. Deary me that doesn't fit the narrative at all, does it.

Queue the usual lefties wading in with some deflection or other. ...

 

[west didsblue]

That note, origin and author unknown, most assume refers to the fact that Bown's government bailed out the Banks and therefore massively increased public debt. Something that pretty much every western government did and which the tories supported. It was 100% not by choice.

It was Liam Byrne, Chief Secretary to the Treasury.
https://amp.theguardian.com/comment...ter-there-is-no-money-labour-general-election

 

[mat]

 

[west didsblue]

So when Labour are in power and world events cause economic disaster and hardship, it's not Labours fault. But when the Tories are in power, and with COVID we have the worst economic shock since WW2, immediately followed by a war in Europe causing a 10X increase in gas prices, the lefties on here say the Tories are to blame for our predicament. Right.

If what you say is correct every country would be in the same boat and the pound would be stable relative to all those countries. It’s not.

 

[bluethrunthru]

we used to grow our own hops in Kent - I suppose those fields were more profitable if we built housing estates on them - people will prefer the decimal rather imperial way when its £10 a pint - makes the price of a round much easier to calculate

Price of beer set to soar as plunging pound sees the cost of imported hops skyrocket

A leading brewery boss has warned the price of beer could be set to soar, as the pound plummeting against the dollar leads to the increased cost of hop imports.

www.lbc.co.uk