Bank of England won’t shy away from raising interest rates amid market turmoil
The Bank of England’s surprise monetary intervention today came in response to ‘serious concerns’ about the short-term financial stability of some ‘large pension funds’, a Treasury source said.
The bank’s decision to buy government bonds – or gilts – was an attempt to calm markets reeling from the government’s mini-budget last week.
Investors were spooked by Kwasi Kwarteng’s plans to dramatically increase government borrowing, causing the pound to fall to an all-time low against the dollar on Monday. Prime Minister Liz Truss has yet to speak publicly about the country’s financial difficulties.
The government has denied causing the sterling crisis, instead pointing the finger at Russia’s war in Ukraine, which it says is wreaking havoc on all major economies.
Talk to Sky NewsTreasury Financial Secretary Andrew Griffith defended the chancellor’s plans, saying the pound’s dramatic fall was not the result of the government’s economic policies.
“We are seeing the same impact of Putin’s war…all major economies are facing exactly the same problems,” the Tory MP said.
However, many senior Tories have warned the Government’s plan is unsustainable, with one saying ‘this inane madness cannot continue’.
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UK government ready to have ‘serious dialogue’ on NI protocol, says Coveney
Let’s move on to Brexit for a moment…
The UK government is ready to engage in a “serious dialogue” on the Northern Ireland protocol, the Irish foreign minister has said.
Simon Coveney said Westminster’s messages on the matter appeared to have softened. British ministers have previously threatened to unilaterally override the deal, which Brussels says would be a breach of international law.
After meeting Northern Ireland Secretary Chris Heaton-Harris at Country Down, Mr Coveney said their discussion focused on rebuilding partnerships.
Referring to the protocol, he said: “We know what the obstacles are, they have been there for too long.
“There are new people actually in the relationships now.
“It is no coincidence that the new Prime Minister (Liz Truss) met with President (Ursula) von der Leyen, President (Joe) Biden, the Taoiseach (Micheal Martin).
“The conversations, from what I understand, have been positive in terms of trying to find a reasonable way forward.
“From the EU’s point of view, they don’t want this problem to drag on.
“The last thing the EU wants to do is take the UK government to court.”
RorySullivanSeptember 28, 2022 9:00 p.m.
The idea that government can produce growth is ‘ridiculous’, says ex-BoE chief adviser
A former chief adviser to the Bank of England has said the idea that the government can deliver growth over the next two years is “ridiculous”.
Highlighting the current problems in the gilt and mortgage market, Charles Goodhart said Times Radio: “You can say goodbye to growth over the period from now until the legislative elections.”
RorySullivanSeptember 28, 2022 8:30 p.m.
Prime Minister silent on the financial crisis
Liz Truss has been accused of hiding.
While she continues to give foreign policy updates on social media (see below), she has yet to publicly comment on the financial crisis triggered by her government’s policies.
RorySullivanSeptember 28, 2022 8:05 p.m.
IMF rebuke echoes 1976 – but this crisis could be much worse
For those with very long memories, there are terrible echoes of 1976 ringing in our minds right now. Not, unfortunately, the long hot summer, but the great IMF crisis that tested the early days of James Callaghan’s Labor governmentwriting Sean O’Grady.
IMF rebuke echoes 1976 – but this crisis could be much worse
Today’s crisis is financially worse than Britain’s last IMF contact, as Sean O’Grady explains
RorySullivanSeptember 28, 2022 7:47 p.m.
Calls on Truss to ‘come out of hiding’ as Bank battles budget turmoil
Liz Truss has been accused of hiding as her tax gift budget caused economic turmoil as the Bank of England was forced to intervene to prevent a crisis at the UK’s major pension funds.
The Bank embarked on an estimated £65billion bond buyback amid what a Treasury source described to The Independent as “serious concerns about the short-term financial stability of some of the UK’s major pension funds”.
Calls on Truss to ‘come out of hiding’ as Bank battles budget turmoil
‘Inept madness’: Tory MPs fear Chancellor’s ‘growth plan’ could cost them next election
RorySullivanSeptember 28, 2022 7:26 p.m.
The mini-budget was ‘the worst unforced economic policy mistake of a lifetime’, says think tank boss
The current financial crisis is “by far the worst unforced economic policy mistake of my life”, said the chief executive of the Resolution Foundation.
Torsten Bell, whose think tank aims to improve the lives of low-income people, said the destruction caused by Friday’s Kwasi Kwarteng mini-budget “is hard to fathom”.
RorySullivanSeptember 28, 2022 7:10 p.m.
Ministers must give financial statement by November, senior MP warns
The government is due to give another financial statement soon, a senior Conservative politician has said.
As the economic fallout from the mini budget continues to be felt, Sir Roger Gale said BBC News“I don’t think we can wait until November, which is the current intention as I understand it.
“I think so, we need a statement very quickly to calm the nerves, stabilize the market and very clearly define the business plan so that everyone correctly understands where we are going.”
The MP for Thanet added that the ‘lack of clarity’ in the mini-budget had caused ‘the pound rush’.
RorySullivanSeptember 28, 2022 6:50 p.m.
World baffled by UK government’s economic policies, says ex-treasury minister
Businesses and investors around the world are “wondering what is happening in the UK”, said a counterpart from all walks of life.
Former Treasury Minister Lord O’Neill said BBC Radio 4“It’s leeway for the government, in my opinion, to think seriously about what it’s really trying to do and…this idea that you can magically quadruple productivity by a tiny reversal of the Corporate tax policy is at the core of why investors and businesses around the world, let alone here at home, are wondering what is happening in the UK.
RorySullivanSeptember 28, 2022 6:30 p.m.
Government denies responsibility for market turmoil as pound plummets
The government has tried to deny responsibility for Britain’s financial woes, saying all major economies are suffering as a result of Vladimir Putin’s war in Ukraine.
Liz Truss and Chancellor Kwasi Kwarteng have been widely accused of scaring off investors with their plans to cut taxes for high earners and increase government borrowing.
After Mr Kwarteng presented his mini-budget on Friday, the pound plunged, hitting an all-time low against the dollar on Monday.
Government denies responsibility for market turmoil as pound plummets
Mini-budget called a “reckless and ideological disaster” by some conservatives
RorySullivanSeptember 28, 2022 6:05 p.m.
Video: Angela Rayner mocks Liz Truss’ pork market quote during party conference speech
Angela Rayner mocks Liz Truss’ pork market quote during party conference speech
RorySullivanSeptember 28, 2022 5:51 p.m.
