Hunt is just rolling back a poorly thought out package of measures to try and get us back to the less bad
They weren't investing only in govt bonds, they made trillion pound bets on LDIs which were based on the bonds they held that the yields wouldn't increase. Had they not made those bets they would have been fine. They were never in danger of not getting the money owed via the bonds back. The govt will never default on it's bond debts. Instead of making bets on LDIs, they should have been buying more bonds.
luckily now it's cancelled, mortgage rates will go back to what they were the other week and financiers will say soz and give the Bank of England their £60bn back. So that's all good.
give the Bank of England their £60bn back. So that’s all good.
its funny money (quantitative easing) anyway, but with the latest annoucements the BoE will likely be able to resell the bonds for more than they paid.
Truss has to be gone by the end of the week, there's no other option. If they do keep her on then we are just pausing any hope of getting the situation back under control. Who the hell will replace her though is terrifying. We can't have Johnson back, that will just cause the system to implode, so amazingly letting Hunt be a caretaker could well be the best option?!
Hunt is just rolling back a poorly thought out package of measures to try and get us back to the less bad, but still pretty damn bad, position we were in over the summer.
It won't get us back there but it will get us some of the way. The amount of emergency funding the Bof E did will have a lasting effect that cannot be undone, lingering for a generation at least. It will eventually become background noise but it will still be there. The bigger issue is the damage to our reputation, that will take a complete change of government (ie none of this lot in office) and a period of rebuilding trust that could take 3-4 Parliamentary cycles. We need to have a decade or more of solid, sensible and low risk decisions that are predictable. Hunt has started that today but his next move will be very tough as even the slightest miscalculation or ambiguity that could spook the markets will push us further back. The merest presence of the current cabinet near any power though will hinder the process massively.
I don’t think thats a fair assessment. Government bonds are historically the opposite of “gambling” – they are, in normal circumstances, extremely slow-moving, low-revenue investments. Exactly what a prudent pension fund should invest in during the draw-down phase. What happened this month was the government s..wed up so badly they went to the wall causing issues for those funds.
Exactly, Kwarteng ripped the safe building blocks of their financial planning out from underneath them with absolutely no warning whatsoever. They had no options available to them as everything was moving far too fast for them to release funds to keep afloat for any longer than when the BofE stepped in. If that decision had been delayed by even a day then it's highly likely that some of the pension funds would have completely collapsed. The domino effect of that would be devastating.
We can’t have Johnson back, that will just cause the system to implode,
However unthinkable that might be it is probably the only way that Truss could be replaced without the argument for an early general election becoming too compelling.
The Tories can't keep changing prime ministers with different policies and no mandate willy-nilly without calling a general election and putting it to voters to decide.
They might technically be able to do it but it would be deeply damaging for them and would alienate voters even further.
By reinstalling Johnson they could reasonably argue that he has a mandate and no election would be required for a couple of years.
It should also be remembered that when Sajid Javid kicked off the current debacle by resigning in the beginning of July the Labour lead was around the 8% mark, Johnson is nowhere as toxic for the Tories as other potential contenders for the role of Prime Minister.
I think it is unlikely but I am not privy to the internal machinations of the Tory Party so I wouldn't rule it out.
The Tories can’t keep changing prime ministers with different policies and no mandate willy-nilly without calling a general election and putting it to voters to decide.
it'll be interesting to see how they manage transition even if they do go the full 2 years with truss though. She must be viewable as unelectable now, so do they do a leadership vote in, say, october 2024, so they have a new leader in place in time to do policies and marketing in time for a jan 2025 election? do they need a no confidence vote to manage that or do they just have a word in her ear?
o amazingly letting Hunt be a caretaker could well be the best option?!
Steady on, "least bad" might be more apt
so do they do a leadership vote in, say, october 2024
They'll probably already have had two more leaders before they get to October next year. Hopefully the second one will be chosen while they're in opposition. 🤞🏻
Is there any point that our new King can step in and call a halt to all this and demand a GE?
Is there any point that our new King can step in and call a halt to all this and demand a GE?
Liz-o-Matic can request that parliament be dissolved
Gooo-on Liz! Take 'em all down with ya!
do they do a leadership vote in, say, october 2024
No Truss is toast, she has to go now. She has no credibility, no authority, and no possibility of regaining either. All that can happen from now on is that she will get even weaker, she has no control over her own policies.
What a shambles . . . .
You can only imagine the fortunes that have been made "on the side". Most of us will work a lifetime and not make the sort of money people have made in the last few weeks.
I think it is unlikely but I am not privy to the internal machinations of the Tory Party so I wouldn’t rule it out.
Agree. Johnson is the only candidate who can claim to have public support, even if that is on shaky ground after partygate. He would be able to stand in front of the electorate and say 'tory MPs are idiots, they made a mistake. Let this be a lesson to any politician who tries to go against the will of the people'. They'll still lose, but would at least have more than a 100 MPs.
Alternatively Hunt may struggle on as a technocrat caretaker whose single job is not to crash the economy while they see out the rest of the term to their inevitable annihilation in 2024. Sunak, Morduant and Wallace have zero mandate and would have to call an election before christmas. If they didn't and tried to tough it out then the tories will face an existential defeat at the next election.
I still think Truss will try to tough it out though. The lack of tory consensus on a successor will mean she will be stuck in place. If I were her I'd say f*** it and call an election just to get my own back. 😀
Can't see Truss being around for long at all...
"Why is Truss still PM?"
"Because her party can't find anyone better."
"Why isn't she calling an election?"
"Because she knows the country don't want her as PM".
She's toast.
Yes she’s done, but if the tories can’t agree on a successor she’s not going anywhere. The tories are so divided they’re never going to agree with each other. In that case Starmer needs to call them out with a VONC. Then they’ll be forced to support and limp on with Truss or go for the nuclear option.
The tories are so divided they’re never going to agree with each other.
They are extremely divided but there are enough Tory MPs for them to find a neutral candidate who can act as caretaker, it doesn't have to be one of the big beasts.
The motivation for putting their differences to one side and uniting behind one neutral individual without any wayward policies is that for very many their political futures are at stake.
Which is obviously an extremely powerful motivation.
Mini Budget
"Gone but not forgotten"
R.I.P
The BBC are still calling it by the Orwellian name Truss and Kwarteng gave it… “The Growth Plan”.
