Let’s start with the good news. This change of Prime Minister undoubtedly makes a difference for the better. The Conservatives have finally found a leader with a decent chance of making it until the next General Election, providing some much-needed political stability. The financial markets have reacted positively too: the pound has strengthened, the cost … Continue reading Rishi Sunak offers greater stability, but also more pain
The new Government is clearly in an almighty mess, but I’ll leave the political commentary to others. Here are some thoughts on the economics and the markets. Let’s start by summarising what went wrong. The tipping point was the mini-Budget in September. The mistake here was not the Energy Price Guarantee, or the cancellation of … Continue reading Can ‘Trussonomics’ survive?
The reluctance of both the Chancellor and the Prime Minister to confirm that non-pensioner benefits (notably Universal Credit) will be uprated next year in line with inflation has fed speculation that the Government is considering a real-terms cut. My advice would be to squash this idea as soon as possible – mainly because it is … Continue reading The case for a real-terms benefit cut is weak – and it would be political madness
Critics of ‘Trussonomics’ – and there are many – have been quick to claim that the new energy price plan puts its economic credibility at risk. Indeed, early estimates suggested that the ‘Energy Price Guarantee’ could cost the taxpayer £150 billion or more over two years, making it the most expensive economic policy in history. … Continue reading The cap on energy prices is a gamble that is about to pay off