What have we learned from the first week of ‘Trussonomics’?

The old saying that a ‘week is a long time in politics’ can rarely have been more apt. The changes in Westminster have been overshadowed by the transition in the Monarchy. But the new Prime Minister has also begun to tackle the challenges facing the UK economy. The first big policy announcement was a freeze … Continue reading What have we learned from the first week of ‘Trussonomics’?

Liz Truss may need to act quickly to reassure the markets – but this won’t be ‘Black Wednesday’

The financial markets are nervous. Investors are demanding a higher yield for holding UK government bonds (‘gilts’) and the pound has continued to slide against the US dollar. It is still too soon to talk of a ‘sterling crisis’. Nonetheless, the heightened political uncertainty and large current account deficit could make UK assets particularly vulnerable … Continue reading Liz Truss may need to act quickly to reassure the markets – but this won’t be ‘Black Wednesday’

The pros (and cons) of cutting VAT

Liz Truss is apparently mulling the ‘nuclear’ option of cutting the standard rate of VAT by five percentage points to support the economy. This has triggered a predictable backlash from my fellow policy wonks, led by the Institute for Fiscal Studies (IFS). However, in these extraordinary times, every lever may have to be pulled. The … Continue reading The pros (and cons) of cutting VAT

Nationalisation of energy suppliers would solve nothing – and could make the crisis even worse

Kudos to Gordon Brown. The former Labour Prime Minister and Chancellor is at least coming up with bold ideas to tackle soaring energy bills. Unfortunately, his ideas are not new, and they are not good ones either. Brown’s starting point is that the energy price cap should be ‘suspended’ before the results of the latest … Continue reading Nationalisation of energy suppliers would solve nothing – and could make the crisis even worse