Liz Truss panics as the market continues to plummet

Click play to hear this article. London — Do your best. Liz Truss can’t calm her mayor down. Despite canceling plans to cut taxes on the highest earners, filing more detailed budget statements for almost a month, and stopping the appointment of a controversial senior official to oversee the Treasury, the Bank of England is trying once again I couldn’t help but do it. To stabilize the turmoil in the market. Insiders noted the surprise appointment of James Bowler to the top position in the Treasury, beating out Antonia Romeo, widely briefed as a sign of unrest 10 times. “The PM is panicking and doing almost everything he can to calm the situation. She’s so tired of the aftermath of the mini-budget and now wants to overhaul everything that looks daring,” said a senior Whitehall official. Treasury officials say they have become much more reconciled last week as Prime Minister Kwasi Kwarteng tried to stabilize the buff. However, despite these U-turns, the current market unrest could be out of the hands of the government. The so-called mini-budget came at a time when the economy was particularly weak due to high inflation and attempts by the Bank of England to end a policy of buying up massive amounts of government debt. after the 2008 financial crisis. Kwarteng’s tax cut, presented without details on how it was financed, scared the market and sparked a crisis for UK pension funds as the massive surge in yields forced them into bonds. The Bank of England provided a £65 billion checkbook, giving pension funds more time to raise cash and prevent the so-called doom loop from spinning. Governor Andrew Bailey said on Tuesday that the Bank’s emergency aid would definitely end on Friday. As a result, the longer it takes the UK’s new prime minister to tame the market, the less support he has, exacerbating political problems. Jill Rutter, a senior research fellow at the Institute for Government and a former Treasury official, said: Orthodoxy.” The race to survive will now come up with a way to restore credibility by the end of October, when Kwarteng and his finance team will have to explain how they will pay for the tax cuts. IfG’s Rutter will be able to help fund a one-time event like an asset sale. “It’s really hard to see how you can come up with a vaguely communicable plan to control that,” said IfG’s Rutter, who pointed out that finding a . if left, [the government] As one market strategist spoke of the condition of anonymity, giving you on the 31st would probably be irrelevant because you would be dealing with a bigger problem. “When you are somewhat stable as a government, [pension funds] … depending on how the call will react [the market] We see overall financial long-term sustainability.” But the government’s toothless reputation is unlikely to recover. “If the root cause is fiscal policy, the problem won’t be resolved until the market’s concerns over fiscal policy are alleviated,” said Paul Dales, chief UK economist at Capital Economics. “It makes the Prime Minister’s mid-term fiscal plan for 31 October a very big event for the gold market, the pound and the Bank of England. We think the Prime Minister has to work really hard to convince his mayor that his financial plan is sustainable.” Ministers originally said the £43 billion tax cut plan would be financed by borrowing and economic growth, but experts warn that public spending must now be cut. The Institute for Fiscal Studies think tank predicts that the Prime Minister will have to spend £60 billion less by 2026-2027, and the International Monetary Fund (IMF) believes that the UK’s high inflation will last longer than many other major economies. Reports have been published that will continue. Torsten Bell of the small-budget Resolution Foundation explains why this can have lasting effects. “In a world with rising interest rates and high inflation, the big picture is that we don’t want the only country where everyone decides to be seen as a bad choice.” “It’s important to show how serious you are,” he said. [the markets] Don’t believe it.” One government official speculated that to fill a hole in public finance and add up the numbers, Truss and Kwarteng would have to U-turn additional aspects of the mini-budget, such as a decision to cancel the planned corporate tax hike. Meanwhile, It’s not just the mayor who is still unconvinced by Truss and Kwarteng’s approach: Senior Conservative lawmakers lined up to publicly slander at the prime minister’s debut session on a Treasury question at the Commons on Tuesday. Secretary Julian Smith asked for assurance that the tax cuts would “not be balanced behind the poorest people in the country.” It’s usually a line of attack for opposition lawmakers. The mayor won’t get the support of his fellow lawmakers in the next financial statements. It’s going to be maddening again, Prime Minister spokesman on Tuesday said Truss was “committed to the growth measures proposed by the next Treasury Secretary.” ncellor” and “The fundamentals of the UK economy remain strong.” While that statement continues to be tested, so are the positions of Prime Minister and Prime Minister. Annabelle Dickson contributed to the report. This article is part of POLITICO Pro. POLITICO A one-stop solution for policy professionals that combines the depth of journalism with the power of technology Exclusive, breaking news and insights Customized policy intelligence platform High-level public relations network

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