Bank of England will ‘not hesitate’ to raise interest rates amid market turmoil
Liz Truss has been accused of hiding away while her tax giveaway mini-Budget caused economic turmoil.
On Wednesday, the Bank of England was forced to intervene to prevent a crisis in the UK’s major pension funds.
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.
There has been no sign of Ms Truss, who was last seen in public sitting on the green Commons benches alongside her chancellor for his statement.
Former cabinet minister David Davis said: “This was her manifesto for the leadership, so she has to come out and defend it in a forthright way.”
Lib Dem leader Sir Ed Davey called on the PM to break cover, warning that she had just “24 hours to fix this economic disaster and prevent people losing their homes”.
The government has denied causing the sterling crisis, instead pointing the finger at Russia’s war in Ukraine, which it said was playing havoc with all major economies.
Calls for Truss to ‘come out of hiding’
Calls have grown for Liz Truss to come out of hiding after the Bank of England was forced to intervene on Wednesday to prevent a major pension crisis.
Bank of England launches emergency action after pound falls
‘Inevitable’ Tories will lose next election, says former Conservative MSP
A former Conservative MSP who believes Liz Truss has “lost control” of the economy has said it is now safer in the hands of a Labour government.
Professor Adam Tomkins, who was Glasgow’s MSP, added that it was “inevitable” the Tories would lose the next election as a result of their handling of the economy.
“That is an extraordinary thing to have to say and I’m saying it because of what Kwasi Kwarteng has done to the market in the last few days,” he told the BBC.
“It’s perfectly clear the economic future of the UK would be safer hands if Labour were in power than the Conservatives.”
Voices: How did we find ourselves in such dire financial trouble?
Our chief business commentator James Moore has this report about the UK’s financial trouble:
What has happened was created by a combination of international crises and desperately bad domestic policymaking. Some of the hits were unavoidable, but by no means all
Tory MPs are not panicking yet – it’s worse than that
John Rentoul writes about discontent within the Tory party over the government’s handling of the economy:
The speed of events is stunning. Truss has been prime minister for 22 days, 12 of which were taken up with mourning the death of the Queen. Yet at least one Tory MP is already privately predicting that Truss will be gone by Christmas.
Read more here:
Truss has been prime minister for 22 days, 12 of which were taken up with mourning the death of the Queen. Yet at least one Tory MP is already privately predicting that Truss will be gone by Christmas, writes John Rentoul
Rishi Sunak to skip Conservative party conference
Tory leadership runner-up Rishi Sunak will not attend the upcoming Conservative party conference.
The former chancellor has previously warned that Liz Truss’s economic policies could harm the economy.
Former chancellor has been keeping low profile since the leadership race ended
What are government bonds and how will the Bank of England use them to stabilise markets?
Earlier today, the Bank of England decided to buy up long-dated gilts to shore up the British economy.
My colleague Joe Sommerlad explains how government bonds work:
Threadneedle Street intervenes to buy up long-dated gilts and ‘restore orderly market conditions’
No 10 rubbishes link between mini-Budget and sterling crisis
In an earlier post, we mentioned that the government rejects the idea that its mini-Budget caused the currency crisis.
This argument comes despite the pound slumping immediately after Mr Kwarteng’s announcement on Friday.
Sky New’s Sam Coates has more details on No 10’s rebuttal.
“Ministers in cabinet rubbish the link between Friday’s statement and today’s turmoil,” he tweeted.
Don’t make NHS and public services pay the bill for tax cuts, Kwarteng told
Kwasi Kwarteng has been warned it would be an “act of national vandalism” if he imposes austerity measures on the NHS and other public services to calm the turmoil caused by his tax giveaways to the rich.
The chancellor is expected to use a statement on 23 November to announce belt-tightening measures in a bid to persuade the markets that he can get the UK’s public finances back under control following last week’s mini-Budget.
Treasury sources confirmed that cabinet ministers are to be asked to find “efficiency savings” in budgets, with neither health nor any other department exempt.
‘Act of national vandalism’: Fears of five-year austerity spending freeze to reassure markets
British government willing to have ‘serious dialogue’ about NI protocol, says Coveney
Turning to Brexit momentarily...
The UK government is willing to engage in “serious dialogue” about the Northern Ireland Protocol, the Irish foreign minister has said.
Simon Coveney said Westminster’s messaging around this topic appeared to have mellowed. British ministers have previously threatened to unilaterally override the agreement, something Brussels says would constitute a breach of international law.
After meeting the Northern Ireland secretary Chris Heaton-Harris in Country Down, Mr Coveney said their discussion had 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 effectively in the relationships now.
“It is not a coincidence that the new Prime Minister (Liz Truss) has met President (Ursula) von der Leyen, President (Joe) Biden, the Taoiseach (Micheal Martin).
“The conversations, from my understanding, have been positive in terms of trying to find a sensible way forward.
“From an EU perspective, they don’t want this issue to drag on.
“The last thing the EU wants to be doing is taking the British government to court.”
Idea government can produce growth is ‘ridiculous’, says former BoE chief adviser
A former chief adviser at the Bank of England has said the idea the government can produce growth in the next two years is “ridiculous”.
Pointing to the current problems with the gilts market and with mortgages, Charles Goodhart told Times Radio: “You can say goodbye to growth over the period from now until the general election.”