‘Mini’ budget

[Apthorpe]

I don't really see why all the people who argue that the Bank of England must be independent now complain when the Bank and Government seem to be pursuing different agendas. WTF did you expect?

 

[Fair Hill]

Is this Kwarteng chap being investigated for insider trading?

 

[Apthorpe]

Is this Kwarteng chap being investigated for insider trading?

To be guilty of insider trading, one needs to A) have acted on insider information and B) traded.
Kwarteng has not traded. The cretinous accusation - made incidentally by complete morons - is that a previous employer did. However, since that person apparently made the trades long before Kwarteng was Chancellor, it's pretty hard to conclude that it's worth an investigation, or anything other than an idiotic smear.

 

[Mungo]

Tricky to call, because in fact this is a storm in a teacup. Long term, this is a complete non event. The tax cuts are small, the market already knew about the energy price cap and it is not out of line with other countries, and the quality of forecasts mean it is impossible to say that it presents any credible risk.
I'm more worried about the quality of the Bank of England than Truss/Kwarteng. Truss cannot be as stupid as she is made out to be and casual sexism aside must be moderately able. Kwarteng is absolutely outstandingly intelligent and able. Doesn't guarantee he's correct, but any argument relying on the idea that he is clueless, out of his depth or reckless must be categorically wrong.

There are elements talking up a massive feeding frenzy for reasons of either political enmity/ media entertainment/sheer stupidity or standing to gain from easy momentum trades during a panic. Leaving the politics out of it, the behaviour of the BBC is extraordinarily reckless. It is by no means the worst offender, but it is a national broadcaster and is taken seriously abroad. In that light, they ought to be seeking serious considered comment from serious individuals, rather than some of the dross they have been headlining. There has certainly been no serious attempt at impartiality nor at objectivity or context. This evening's feed had a relatively junior analyst from an online stockbroker answering questions like a radio 5 live phone in. Completely out of his depth and not given the chance to think before typing. Yesterday they headlined the opinion of someone from a tiny firm of no obvious quality that nobody had ever heard of. Etc.

I can't decide if it's already blowing over (the rational outcome, pending hearing the other half of the plan in November),
.....or if the feeding frenzy will become a self-fulfilling disaster. Which is not the correct outcome, but once enough lemmings jump off a cliff there's bound to be a messy pile below. It's a classic panic and there is no rationality at work, anything could happen. Nothing should happen.

Given that something very much like this was predicted (most notably by Sunak), could it be said to be reckless to go ahead, when there was a very real risk of a panic setting in?

I also don’t really understand why the OBR report wasn’t published - this seems to be one of the causes of the panic.

 

[Bavarianbrit]

We are so far down in the food chain we are powerless to change these events. Stop buying electronic everythings as they are nearly all imported (demand a "made in the UK" label?) would be my rallying call to try to stem the flow of sterling abroad but I am certain that every yoof would ignore it.

 

[Mungo]

We are so far down in the food chain we are powerless to change these events. Stop buying electronic everythings as they are nearly all imported (demand a "made in the UK" label?) would be my rallying call to try to stem the flow of sterling abroad but I am certain that every yoof would ignore it.

How would you propose most us do our jobs, reliant as we are on electronic everythings?

If I removed all the foreign made equipment from my office, I would be left sitting on a bare concrete floor, naked but for socks, holding a 40 year old fountain pen.

Which of course illustrates a large part of the problem - but buying British isn’t even possible for most things you need to do a modern job.

 

[Ratel]

How about diverting these tax breaks into positive reinvestment instead into the manufacturing industries where the UK once excelled. Perhaps now is too late as most of the skilled labour force are into their 70s-80s and stacking shelves at supermarkets to make up the income to keep their home warm.
Coventry in the 1970s had so many high skilled jobs from Alvis fighting vehicles, Armstrong Siddeley, Chrysler/Rootes, Jaguar, Massey Fergusson, Carbodies taxis, Herbert machine tools, Morris Engines, the Royal Ordnance factory, the Torrington Company, Coventry Radiators, Triumph cars, Triumph motorcycles just up the road in Meridan, the list just keeps going on as do I.

It indeed was a terrifically skilled city in terms of labour. One thing killed it stone dead, it begins with U and ends in S.
These ridiculous salaries being quoted and obviously earned by some on here make me laugh. Try living on £180 a week pension with a small HM one on top. It takes a lot of doing if you don't have much in the savings line. Labour may give me more for my last few years. I did cross myself and spit when I wrote the last sentence.

 

[Bavarianbrit]

It indeed was a terrifically skilled city in terms of labour. One thing killed it stone dead, it begins with U and ends in S.
These ridiculous salaries being quoted and obviously earned by some on here make me laugh. Try living on £180 a week pension with a small HM one on top. It takes a lot of doing if you don't have much in the savings line. Labour may give me more for my last few years. I did cross myself and spit when I wrote the last sentence.

Universities?

 

[Bavarianbrit]

How would you propose most us do our jobs, reliant as we are on electronic everythings?

If I removed all the foreign made equipment from my office, I would be left sitting on a bare concrete floor, naked but for socks, holding a 40 year old fountain pen.

Which of course illustrates a large part of the problem - but buying British isn’t even possible for most things you need to do a modern job.

It was of course meant as a tongue in cheek off the cuff remark typing this as I am on a laptop.

 

[Ratel]

Universities?

You are a Card, you know the answer well.

 

[Ratel]

I love it, I was over there at the end of July and will be going back again very soon and have a family break on a canal barge booked early in the new year. The wife and kids have been over there on 3 separate occasions since I got back.

I’m seriously considering investing in some property there, once the dust settles after this joke of a mini budget I’m hoping prices will drop by 15-20% and I’ll throw a few more bob into the economy to help get things back on track.

Do you like it yourself?

Now where did I dock that submarine and gunboat.

 

[Fair Hill]

With regard to the electronic devices, Apple employ over 6,000 people in Cork but if anyone here in Ireland wants to upgrade an iPhone or laptop it will make more sense to book a cheap Ryanair flight to the U.K. and avail of VAT free prices. Thanks to Mr. Kwarteng we’ll be able to save €250 on a new iPhone or 18 grand on a top spec Hublot watch.

This tax free shopping for tourists could be a nice earner if I time my visits for when my English friends are thinking of splashing out on designer goods, laptops or jewellery.

 

[norcan]

You are a Card, you know the answer well.

Right, definitely nothing to do with the global dominance of financialisation or anything.

 

[Ratel]

Right, definitely nothing to do with the global dominance of financialisation or anything.

Definitely not, it was my part of the world and I worked in it initially. The unions killed Coventry's industrial heart as sure as I am writing this. Not only Coventry but most mechanical areas associated with the car industry.

 

[Apthorpe]

Given that something very much like this was predicted (most notably by Sunak), could it be said to be reckless to go ahead, when there was a very real risk of a panic setting in?

Yes, it could. However, they clearly signalled the majority of the budget in advance to mitigate that, so it's rather hard to understand the recent "panic" as being anything other than sentiment-driven. The market knew most of the measures before and priced them in.
On the other hand, I don't understand why they announced one side of the coin now and left the other side for two months time. There has been a lot of pressure to get the energy bill support in place immediately, from all sides, so it is a little unfair to criticise them for doing that.

Perhaps there's some reason why an autumn budget must be in September, maybe to give time for the bureaucracy to get the measures in place.
They do have the problem that there is very little time for them to get their programme in place and working (hopefully) before an election.

I also don’t really understand why the OBR report wasn’t published - this seems to be one of the causes of the panic.

Many people presume the OBR report would say the sums don't add up. The difficulty is that the OBR doesn't have any data to make projections with. The truth is that nobody knows how humans will react to having had a tax cut,( and most of that cut was to the low paid despite the bleating, ) going into a recession/cost of living crisis. Also nobody knows what, if anything, the costs and benefits will be. It's a stab in the dark and the OBR doesn't have any particular skill at getting those guesses right.

Is it really inflationary? I think that argument is nonsense. Spending more money because you have to to keep the lights on, is neither irresponsible nor inflationary. It's obvious that the spending would come down as soon as cheaper bills are available.

Overall, is it reckless?

 

[Fair Hill]

Is it reckless? Have a look at this weeks Economist, the main picture and headline sums up the situation perfectly.

 

[Bavarianbrit]

Definitely not, it was my part of the world and I worked in it initially. The unions killed Coventry's industrial heart as sure as I am writing this. Not only Coventry but most mechanical areas associated with the car industry.

I came back from Canada end of May 1970 and the only job I could find was Chryslers Ryton plant as a line springer. 9 weeks on the night shift and every week there was a tools down at around 2am when the buses did not come before 6am to get back home so I was sitting around with no earnings then I quit. I heard later that the lower management nobs were sent down to the line to pee off a worker and cause a strike as car sales were flagging and they needed to reduce the wages bill. Its what first got me into the drafting game at Banbury Buildings doing concrete squash court sales/planning drawings.
Will there soon be unemployed estate agents queuing up at the food banks? I remember during the last panics when lots of them closed their doors.

 

[VSS]

If I removed all the foreign made equipment from my office, I would be left sitting on a bare concrete floor, naked but for socks, holding a 40 year old fountain pen.

You might be on to something there. Why not become a trend setter? If every office worker in the country were to wear nothing but socks it would raise workplace morale considerably.

 

[Miki]

This tax free shopping for tourists could be a nice earner if I time my visits for when my English friends are thinking of splashing out on designer goods, laptops or jewellery.

You are painting an interesting picture of yourself Benny.
Dining out with rich Irish friends who are rejoicing in saving 10's of thousands in tax due to the recent mini budget, taking Canal Barge holidays (which are not by any stroke of the imagination cheap) and possibly buying a property or two whilst you are over her (in the UK). Along with intimate knowledge of the tax breaks you will get when you purchase a new 'top spec Hublot watch' and your English friends splashing out on designer good, laptops or jewelery .... taking the Economist and fully engaging with the front page intellectualism being the i'm cleverer than you' cream on the top'.

It's all the classic signs of narcissist tendencies but perhaps i'm building you up to much and you just have a need for attention and for people to think you are important in some way ?

 

[norcan]

Definitely not, it was my part of the world and I worked in it initially. The unions killed Coventry's industrial heart as sure as I am writing this. Not only Coventry but most mechanical areas associated with the car industry.

Very convenient scapegoat there, huh?