Category Archives: liz truss

How Worried Should We Be About The Way The Markets Are Reacting To The Budget?

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The cost of government borrowing has gone up and the value of the pound has fallen as the money markets react to the Budget delivered by Rachel Reeves on Wednesday.

That has sparked some fears that the UK is heading for a Liz Truss-style economic meltdown triggered by the chancellor’s decision to massively increase taxes and government borrowing.

On Thursday afternoon, bond yields – effectively the interest rate the government pays on its debt – hit 4.568%, the highest it has been since August last year.

That is significant because the more money the government has to pay servicing debt, the less there is available to spend on public services.

Sky News economics editor Ed Conway said voters should be “certainly a bit worried” by what is happening on the money markets.

Posting on X, he said: “There has been a marked rise in UK bond yields following the Budget which is greater than what we’re seeing in other markets.”

But he added: “Perhaps the most important thing to say is: this is NOTHING like the reaction we saw following the Truss mini Budget.

“Even so, there has definitely been SOME reaction. The pound weakened a bit and gilt yields rose. This despite the fact that most of this Budget was pre-briefed long in advance. Investors are actively re-pricing UK debt. And that matters.

“The issue at present isn’t the one Liz Truss had to grapple with – a near financial crisis – but something else. The cost of debt servicing is going up. And if debt interest costs goes up it has a direct bearing on the government’s fiscal plans.”

At the same time, the value of the pound against the dollar has also fallen – further evoking memories of the financial crisis which followed Truss’ disastrous mini-Budget two years ago.

Kathleen Brooks, an analyst at trading firm XTB, said the the Budget “has not been well received” by the markets.

Kyle Chapman, an analyst at trading firm Ballinger Group, said the fall in the pound and rise in gilt yields indicated that the market had decided Labour had “overextended” with its borrowing and spending plans.

However, other analysts insisted the current situation was completely different to when Kwasi Kwarteng, Truss’ chancellor, announced £45bn of unfunded tax cuts.

“Investors feared a new Liz Truss moment, but in the end the announcements do not suggest an uncontrolled surge in debt,” Edmond de Rothschild Asset Management portfolio manager, Nabil Milali, said.

Laith Khalaf, head of investment analysis at AJ Bell, said: “Of course, markets are especially sensitive to the effect chancellors can have on interest rates ever since Kwasi Kwarteng took to the despatch box, and with the ten-year gilt yield now climbing to levels seen in the wake of mini-Budget, it’s fair to ask whether Rachel Reeves’ maiden Budget could cause similar problems.

“The answer is probably, and hopefully, not.”

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Blue Plaque Put Up At Supermarket Where The Lettuce That Beat Liz Truss Was Bought

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A fake blue plaque has been installed outside the supermarket where the lettuce that famously defeated Liz Truss was bought.

The commemoration is yet more humiliation for the former prime minister, who only last 49 days in office.

It has been erected at a Tesco in Walthamstow, east London, and says: “A lettuce purchased here in September 2022 lasted longer than prime minister Liz Truss.”

The lettuce stunt was launched by the Daily Star as Truss battled to save her political career in the wake of the disastrous mini-Budget.

Chancellor Kwasi Kwarteng’s package of unfunded tax cuts sent the financial markets into crisis, saw interest rates soar and the value of the pound plummet.

At one stage, the Bank of England even had to step in to prevent the British pensions industry from collapsing.

The Daily Star website set up a livestream, showing the lettuce with eyes and a blonde wig, to see if it would last longer than Truss did in No.10. The lettuce won.

Since leaving office, Truss has struggled to shake off the embarrassment of being defeated by the leafy vegetable.

In August, a banner depicting a lettuce and the message “I crashed the economy” slowly unfurled from the ceiling behind her as she spoke at a pro-Donald Trump event.

Once she noticed it, the former PM left the stage, and the following day wrote on X: “What happened last night was not funny. Far-left activists disrupted the event, which then had to be stopped for security reasons. This is done to intimidate people and suppress free speech.

“I won’t stand for it. Would we see the same reaction if the activists were far-right?”

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BBC Host Looks Shocked As Ex-Tory Minister Brutally Lays Into Liz Truss

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A former Tory minister tore Liz Truss apart on live TV earlier today with such brutality that even the BBC presenter looked surprised.

Justine Greening, who was education secretary under Theresa may, said she was “staggered by the fact that there are still any people in the party who still take Liz Truss seriously”.

Truss, who lost her South West Norfolk seat in July less than two years after her colleagues kicked her out of No.10, spoke at a fringe event at the Conservative’s conference in Birmingham on Monday.

She told a packed room that the Tories would have secured more votes at the general election had she remained in power, and – despite no longer being an MP – claimed parliament has become a “shadow of its former self”.

Discussing the ex-PM’s appearance, the host of BBC Politics Live, Jo Coburn, turned to Greening and asked: “Justine, pleased to see and hear from Liz Truss?”

“Well, I think she can call us when the shuttle lands,” Greening immediately replied.

She continued: “I mean, frankly, it’s astonishing she’s even here after a disastrous Budget that torpedoed any slim, remaining hope that the Conservative Party had at of winning the forthcoming election.

“You know, I am staggered by the fact that there are still any people in the party who still take Liz Truss seriously.”

While Greening was talking, the camera panned to Coburn, who looked shocked at the strength of the former MP’s outburst.

Greening was the MP for Putney between 2005 and 2019, and served alongside Truss in May and David Cameron’s governments.

However, Greening lost the Tory whip after blocking Boris Johnson’s no deal Brexit plan in October 2019.

But, she failed to rule out a return to parliament during her conference appearance today, saying: “I’m currently thinking about what to do.

“What is certainly true is I’m not going to give up on this fight. I think the fight of our lifetime, saving Western civilisation, and that is what I am focusing on.”

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Keir Starmer Has Outlasted Liz Truss, But Trouble Looms Large On The Horizon

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Keir Starmer reaches a significant milestone today – but there will be no champagne corks popping in 10 Downing Street to mark it.

It is now 50 days since the Labour leader became prime minister, meaning he has officially outlasted Liz Truss’ time in office.

Defeating the woman who was outlasted by a lettuce may not be much to shout about, but with trouble looming large on the horizon, Starmer would be wise to take any wins he can.

In a month’s time, Labour will gather in Liverpool for its annual conference as a party of government for the first time since 2009.

But amid the understandable celebrations, there will also be simmering discontent among those who are less than impressed with Starmer’s first few weeks in office.

“The two-child cap will be a big issue at conference, we’re expecting some bother with that one,” a senior No10 insider told HuffPost UK.

“There’ll be debates on the floor about it and a lot of people making clear their unhappiness with the government position.”

Starmer made it clear well before the election that scrapping the Tory-era policy – which prevents families from claiming child tax credit or universal credit for any third or subsequent child – was not on his agenda.

Nevertheless, the PM suffered his first Commons rebellion over the issue less than three weeks after the election, when seven Labour MPs voted with the SNP in calling for the cap to be ditched.

Among the rebels, who were all suspended for six months, was former shadow chancellor John McDonnell.

He told HuffPost UK: “With four million children currently living in poverty, some classified as destitute, there is a child poverty emergency in this country.

“Failing to scrap – or delaying the scrapping – of the two-child limit is far from living up to the promise of change that was the key slogan of the election.”

But the most controversial decision the new government had made so far – and the one which could have the biggest electoral impact – was Rachel Reeves’ announcement that the winter fuel payment for pensioners would no longer be a universal benefit.

Instead, the £200 payment (£300 for over-80s) will only go to those OAPs who also receive pensioner credit, meaning millions will now go without it.

A government source said: “No one wants to have to means test the winter fuel allowance. That’s why we’ve protected those pensioners who need it most. It’s a really difficult decision we had to take to begin to restore the public finances after 14 years of chaos. It won’t be the last one.”

The potential impact of the chancellor’s decision were brought into sharp focus on Friday morning when Ofgem increased the energy price cap by 10%, adding another £12 a month onto the average bill.

More than 400,000 people have so far signed an Age UK petition demanding its reinstatement, a clear indication of the strength of feeling among a section of the public who, worryingly for Starmer, always vote come election time.

Labour have also found time to become embroiled in a cronyism row, with several of the party’s supporters being ushered into plum civil service jobs.

Government insiders insist no rules have been broken, Hannah White of the Institute for Government said Labour “has made an early mistake by attempting to side-step established recruitment practices”.

In a blog, she said: “The established routes protect the civil service from politicisation and ministers from the appearance of impropriety, particularly where in-kind or financial donations are part of the picture.

“Neither objective has been met by this approach, which is all the more unfortunate given Keir Starmer’s focus on ethics and propriety during the election campaign.”

Liz Truss only lasted 49 days as PM.
Liz Truss only lasted 49 days as PM.

via Associated Press

The one unforeseen event which has so far defined Starmer’s time in office was, of course, the riots which erupted after three young girls were killed while attending a Taylor Swift-themed dance class in Southport.

Online misinformation about the alleged killer – amplified by the likes of Nigel Farage – led to a wave of violence and disruption in England and Northern Ireland.

As a former Director of Public Prosecutions, the crisis could almost have been tailor-made for Starmer, and the public appear to approve of how he handled it.

He blamed “right-wing thuggery” for the riots and promised swift justice for those involved – a directive which led to lengthy jail sentences for some.

“The PM was very clear that the best way to stop the disorder was to make people think twice about the consequences,” said a government source.

“The Tories have gone from calling him a lefty lawyer to accusing him of being too tough on law and order. While they dithered, too scared to upset Nigel Farage, the government delivered justice.”

HuffPost UK revealed last week that polling by More in Common showed that voters’ net approval of the prime minister’s response has gone up since the early days of the disorder.

Separate polling by Savanta, shared exclusively with HuffPost UK, shows Starmer remains the most popular politician in the country, but suggests his post-election honeymoon period is coming to an end.

His net favourability is now +2, down from a high of +15 at the end of July.

However, he is still well ahead of Rishi Sunak, who is on -27, and Farage (-21).

Chris Hopkins, Savanta’s political research director, said: “Starmer’s first 50 days in office have been overshadowed, and defined, by his response to the civil unrest that swept the UK this summer.

“Our research suggests the public broadly think the prime minister managed the situation well, and agree with his approach, including his priority of locking up offenders as quickly as possible.

“However, our findings do suggest that the post-election shine has now worn off for Starmer. His favourability ratings have seen a reversion to his normal levels over August, but he is still the most popular politician in the UK.

“In that sense Starmer has managed his tricky first summer pretty well all things considered, although his autumn doesn’t look like it’s going to get any easier.”

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Most Brits Do Not Care Who The Next Tory Leader Is, Brutal New Poll Finds

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Most Brits do not actually care who the next Conservative leader is, according to a new poll.

In yet another humiliating twist for the Tories – just a month after their worst ever electoral defeat, Ipsos UK has found 62% of Brits surveyed were not interested in following who would replace Rishi Sunak.

To make matters worse, that includes 36% of Conservative voters.

The pollsters found none of the candidates are very well known among the British public, despite all of them holding ministerial roles at some point.

Just 45% of the 1,091 adults surveyed said they know a great deal or a fair amount about former home secretary Priti Patel, followed by 26% for shadow home secretary James Cleverly, and 24% for shadow housing secretary Kemi Badenoch.

The polling, which took place between August 2 and 5, also found 34% of the public said they do not favour any of the current candidates.

There was a narrow preference for Cleverly among those surveyed, with 18% suggesting he would do a good job, followed by Patel (17%) and shadow security minister Tom Tugendhat (17%).

Badenoch is slightly behind on 14%, putting her on par with former migration minister Robert Jenrick.

Meanwhile, 9% thought shadow pensions secretary Mel Stride would do a good job leading the opposition – which, unfortunately, is the same percentage of respondents who backed a candidate called “Stuart Lewis”, a fake politician added to the poll by Ipsos.

But, it’s not all doom and gloom for Stride.

While a whopping 44% of respondents said they thought Patel would do a bad job, (and 22% thought the same of Badenoch, 20% of Cleverly, 15% of Jenrick, 11% of Tugendhat), just 9% said thought Stride would also perform poorly.

Trinh Tu, UK managing director, public affairs, said: “This new poll suggests high level of public apathy about the Conservative leadership race.”

She added that Patel seems to be most divisive figure at the moment, but for the most part, “Britons are unfamiliar with the main candidates and say they do not care very much about who will emerge at the winner”.

Meanwhile, 65% said a backing from ex-PM Liz Truss would give that candidate the worst chance of winning.

Far fewer (46%) said Reform leader and MP Nigel Farage would have a negative effect on a candidate’s hopes of victory, and 44% said the same for ex-PM Boris Johnson.

Only former PM and Rishi Sunak’s foreign secretary David Cameron was seen as the one who could have a positive impact overall – 31% said it would worsen a candidate’s chances with an endorsement, compared to 32% who said it would improve.

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Liz Truss Says She Is A ‘Victim’ Of An Attempt ‘To Sabotage My Administration’

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Liz Truss has described herself as a “victim” of “sabotage” almost two years after her party kicked her out of 10 Downing Street.

The former prime minister lost her job after just 49 days in office once she unveiled £45bn of unfunded tax cuts in her mini-Budget, a move which sent the markets into turmoil.

She also lost her seat in the general election last month.

But speaking to The Daily Telegraph’s podcast, the Daily T earlier this week, Truss once again refused to accept responsibility for her fiscal policies.

Explaining why her radical plans to reduce taxes had to be dropped so suddenly in 2022, she said: “I knew, and I was directly threatened with this, that there could potentially be a meltdown in terms of the government not being able to fund its own debt.”

“And I couldn’t risk that,” she said, saying that was “more important to me than me keeping my job”.

She said “powerful people” including the governor of the Bank of England Andrew Bailey and members of the Tory Party “undermined me”.

Truss continued: “For the good of the country, I had to remove myself from office.

“That doesn’t mean I think they were right to do that.

“I was the victim, frankly, of an attempt to sabotage my administration by people who didn’t agree with my policies.

“That was the issue, and what I am saying – and why I am speaking out now – is unless we fix that accountability problem we have in Britain, is we are not going to be able to get proper conservative policies, like lower taxes, supply-side reform, and cutting the size of government.

“Because we have institutions that do not believe in those policies and are prepared to sabotage a government that tries to implement them.”

Truss then said, “I am not responsible for people’s mortgages going up,” – and blamed the Bank of England instead, as the independent institution is responsible for the country’s monetary policies.

It’s worth noting the Bank actually had to intervene to stabilise the pensions market after the mini-Budget.

Truss has tried to repeatedly to redeem her reputation in recent months.

She even slammed the current government after civil servants named her in the official briefing notes for the King’s Speech last month.

Her name was subsequently removed from the notes on the gov.uk website – but that has not stopped Labour politicians from criticising her.

Chancellor Rachel Reeves blamed the economic struggles of the UK on Truss’s premiership on Thursday.

Speaking after the Bank of England finally lowered interest rates for the first time in four years, she maintained that the British economy’s foundations are still unsteady.

Reeves said: “Millions of people are still paying higher mortgage rates after the Conservatives’ mini-Budget less than two years ago that sent interest rates and mortgage rates soaring.”

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Rachel Reeves, \"Homeowners will welcome this cut in interest rate\"

\"But millions of people are still paying higher mortgage rates after the Conservative Liz Truss and Kwasi Kwarteng budget less than two years ago that sent interest rate and mortgage rates soaring\"

\"I have been… pic.twitter.com/DOSB2wnB4c

— Farrukh (@implausibleblog) August 1, 2024

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Rachel Reeves, “Homeowners will welcome this cut in interest rate”

“But millions of people are still paying higher mortgage rates after the Conservative Liz Truss and Kwasi Kwarteng budget less than two years ago that sent interest rate and mortgage rates soaring”

“I have been… pic.twitter.com/DOSB2wnB4c

— Farrukh (@implausibleblog) August 1, 2024

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