Economy

The mini-Budget was a spending spree. The ‘medium-term fiscal plan’ was meant to explain the funding. But what exactly is going to be in it?  Liz Truss and Kwasi Kwarteng were thought to have (finally) come to terms with the need to address the need for some restraint, after their mini-Budget led to market chaos which is yet to settle. Their fiscal statement – in other words, how they would fund their tax cuts – was moved forward by almost a month, to 31 October. Its contents were thought to include some major spending cuts, in a bid to convince markets that fiscal discipline still guides the Tory party. If there are

Speculation has been growing that the Bank of England might announce an extension of its emergency gilt-buying programme which is set to end on Friday. Despite the Treasury moving forward its ‘medium-term fiscal plan’ announcements from November to the end of this month, gilt yields have been rising yet again this week in the lead-up to the end of the scheme. It seemed likely that the Bank’s gilt-buying programme might be extended for another two weeks as a result, in order to buy time before the Chancellor Kwasi Kwarteng’s announcement on 31 October. But tonight Andrew Bailey put that speculation to bed. Speaking at the Institute of International Finance in Washington DC, the

Production will be cut. Supplies to the rest of the world will be curbed. And inflation will rise just a little bit higher. No one ever expected the oil-cartel Opec(+), led by Saudi Arabia, to be friendly to the West, or to help out when it was needed. Even so, its decision this week to effectively side with Russia, and to make the energy crisis even worse, may quickly backfire. In reality, Opec was already in long-term decline. Picking a fight with the US will just make that worse. It was certainly the kind of news the energy markets didn’t need. Just as it was getting over the loss of Russia’s crucial

Liz Truss joins other European leaders in Prague today at the first meeting of the European Political Community. Truss’s presence is sensible, a reminder of Britain’s point that it left the EU, not Europe as a whole. It should also help relations with Emmanuel Macron given how much he has invested in this project. One of the subjects discussed will be energy. The conversation will focus on Putin’s weaponisation of energy and how to keep the lights on this winter. But the anti-Russian alliance has suffered a blow after the news that the Opec+ countries, which include Saudi Arabia and Russia, are going to cut oil production by two million

In theory, I should be delighted about the Liz Truss project. She is saying the things I’ve been arguing for years: talking not just about lower taxes but about basic liberty and how it relates to everyday life. She’s passionate about these ideas – and sincere. I remember watching her deliver a rallying cry, a salute to the ‘Airbnb-ing, Deliveroo-eating, Uber-riding freedom fighters’. This was just over three years ago when she was a Treasury minister. Her speeches were getting punchier and her one-liners becoming newsworthy and memorable. She was turning into one of the most recognisable faces of classical liberalism in Britain – a development which clearly delighted her.

When Liz Truss and Kwasi Kwarteng entered Downing Street, laser focus was not only applied to them, but also to the free market think tanks they had worked with over the years. This evening, Kwarteng paid a visit to two of them, as the Institute of Economic Affairs and The Taxpayers’ Alliance hosted the Chancellor at Conservative party conference for one-on-one conversations. Similar to his speech yesterday, Kwarteng used the opportunity to try to take some heat out of his mini-Budget. When asked if market reaction was part of the Treasury orthodoxy he and Truss had been taking aim against for weeks, he shook his head and pointed to the

Liz Truss wants growth at 2.5 per cent. That figure will allow the UK to pay off the huge cost of her energy subsidy – predicted at around £40 billion – while also putting the public finances on a more sustainable footing. The problem is that growth is elusive. Between the financial crash and the Covid lockdowns, the UK’s average growth rate was just 1.3 per cent.  One of the few sure-fire ways to grow the economy is trade. New markets give companies the chance to grow their sales purely by matching up new consumers with goods that they want. The power to do this, to set our own trade

George Osborne knows a thing or two about an omnishambles Budget. Having hiked taxes on pasties back in 2012, the then-chancellor was forced into a humiliating u-turn. So far, his successor Kwasi Kwarteng is holding his ground over his ‘mini Budget’. But how long can that last? Osborne’s verdict is that it might not be long before we get an answer to that question.  ‘I think I underestimated the ability of the government to blow itself up in its first few weeks of office’ Speaking on the Andrew Neil show on Channel 4, Osborne said it is now ‘touch and go whether the Chancellor can survive’ after the catastrophic fallout from his unfunded tax