Kwarteng says highest rate of income tax being abolished, and basic rate being cut to 19% from next April

[North Cardiff Blue]

This makes no sense whatsoever. Just to add, there isn't any Left Wing Media in the UK, The Guardian, a newspaper that did all it could to discredit Corbyn, is centrist.

You would have been saying in the Boris party threads you wanted him gone for having a party, now he's gone, be careful what you wish for, he was hardly conservative, his politics was not far away from Blairs New Labour.

Now it's Tory plus and you and the Guardian would have been better off keeping Boris.

[North Cardiff Blue]

This is what I don't get. My brother in law was saying this about his sister earlier. I thought one of the main points/benefits of UC was that it was designed in a way that meant people wouldn't suffer financially from taking more work on.

There was quite a low sweet spot, work a day or two and get topped up by UC, it looks like they want to increase the day or two to more like three or four.

[Rjk]

https://twitter.com/AgnesChambre/sta...FvBCXpFaw&s=19

[Taunton Blue Genie]

My take on it all:

Cut in income tax / NI - clearly good for growth. I don't think many are calling for it. I'll get about an extra £70 a month. I'll do something with that, but I'll spend some of it, so will be good for growth. Likely dwarfed by any increase in my mortgage that may come next year mind..

Bankers Bonus cap ending - Good I think. We all know what would happen if the UK capped footballers wages - we would lose talent abroad, and that is what seems to have happened. I can't stand the banks, but I'll hold my nose on it and see what happens.

Abolition of 45% rtax for those earning over £150,000. I don't support that. £150,000 is a very good wage. You are undoubtedly wealthy with that salary. It is true that Labour never had such a rate but that is irrelevent. It's also true that money will seep back into the economy, but at that level I would say it will be spent less well than the tax take would.

Cancelling rise in Corportation Tax. Probably good.I think in practiceit damages our competitiveness

New and start-up companies able to raise up to £250,000 under scheme giving tax relief to investors. - this and other investment policies sound good

Stamp duty cuts. Absolutely good. Strikes me as a cruel and curious tax. I hope Drakeford replicates this.

Generally increased borrowing - this worries me a lot tbh.

All in all, it's a risky set of policies. It should be noted that Labour were criticising tax rises only a few months ago, stating: “This is not the time to consider tax rises, we are in the middle of an economic crisis.” so I think there is a degree of hypocrisy there.
https://www.independent.co.uk/news/u...-b1806739.html

It will be an interesting few months. If it works and we finally get proper levels of growth again then all good. If not, then we could be in significant trouble.

I don't know anyone who thinks the highlighted tax change is acceptable in any way whatsoever. Favouring the rich over the poor regarding the changes in personal tax allowances at this very difficult time seems totally immoral.

[JamesWales]

I don't know anyone who thinks the highlighted tax change is acceptable in any way whatsoever. Favouring the rich over the poor regarding the changes in personal tax allowances at this very difficult time seems totally immoral.

I agree. It seems to have been a curious thing to do at this juncture and a step too far. I calculated roughly that from Premier League players alone, the chancellor will take £30m less in 2023/24 than this year.

That said, I don't think I'd call it immoral. The idea is that it leads to greater investment and growth etc. It is a gamble though, and as I wrote above, I don't support that element of it.

[ToTaL ITK]

You guys are phucked...i'll stay here in gang war torn sweden.

[Canton Kev]

I agree. It seems to have been a curious thing to do at this juncture and a step too far. I calculated roughly that from Premier League players alone, the chancellor will take £30m less in 2023/24 than this year.

That said, I don't think I'd call it immoral. The idea is that it leads to greater investment and growth etc. It is a gamble though, and as I wrote above, I don't support that element of it.

All a load of bollocks. And pretty much everyone knows it. The only thing they’ll invest in (if they don’t just hoard the wealth) will be properties. Less houses on the market means higher house prices and higher rent for us plebs. Landlords are just a richer version of the pricks that scalp tickets.

[Ninja]

All a load of bollocks. And pretty much everyone knows it. The only thing they’ll invest in (if they don’t just hoard the wealth) will be properties. Less houses on the market means higher house prices and higher rent for us plebs. Landlords are just a richer version of the pricks that scalp tickets.

I feel sorry for anyone who has a mortgage. He's just bent them over big-time. Lending rates about to sky-rocket.
Usual Tory shit, rape and pillage the poor while hoarding all the wealth. Keep the paupers in their place.

[Kind of Blue]

There is currently rampant inflation in the UK caused by a plethora of aggregate supply shocks (some local, some global). It's not being caused by excess aggregate demand.

The BoE is doing what it's mandated to do with its one tool, interest rates (monetary policy), to try to control inflation. So, in the lingo, the UK is operating tight monetary policy and raising interest rates. Raising interest rates is designed to dampen consumer demand and investment effectively reducing aggregate demand.

It would be crazy in this circumstance to simultaneously operate a loose fiscal policy (tax cuts). You're stoking aggregate demand financed by government borrowing at a time when you're supposedly trying to control inflation.

So two things are likely to occur - more inflation and higher interest rates.

The "markets" have clearly decided that is not a good recipe. The UK is turning itself into a basket case. It will be interesting to see if the GBP hits parity with the Euro or the USD first.

It's macroeconomic policy from a madhouse.

I’d have to agree. I was half thinking (well, hoping) Truss was being strategic in her messaging during the leadership election, given the make up of the “electorate”, to then become a bit more pragmatic in the short term once in office given the realities of governing in the current economic moment and a general election which isn’t that far away. Essentially, using her leadership bid to roll the pitch for a programme to run on at the next general election once inflation may have been tamed.

I’ve been surprised at the silence since last week’s fiscal event. The lack of reassurance through messaging and explanation isn’t helping with market volatility and does make me question if this has come as a greater surprise to the government than anticipated, although it shouldn’t have.

[HiVis]

So, tell me, how do you think the UK economy has performed over the past twelve years?

between 2002-2007 the economy grew by 2.9% year on year. It nosedived in 2007-8 eradicating most of the gains

between 2010-2015 the economy grew at 2% and grew again by more than 2% in the years 2016-2022, except for 2020 when it nosedived, eradicating a lot of the gains in the previous years.

The economy is larger now than it was in 2002, 2010 and 2015.

[HiVis]

The GBP is now at 1.09 v the $. It seems the financial community doesn't think it's as "brilliant" as you, genius.

Its weird how the left are now using the financial markets in support of their position, whereas at all other times the financial markets are derided by the left.

[HiVis]

This makes no sense whatsoever. Just to add, there isn't any Left Wing Media in the UK, The Guardian, a newspaper that did all it could to discredit Corbyn, is centrist.

the Guardian is centre left.

[HiVis]

There is, of course, one simple way to ensure growth - rejoin the CU, SM and eventually the EU.

But you know that James, you're just not yet ready to admit your voting mistake in 2016.

[the other bob wilson]

between 2002-2007 the economy grew by 2.9% year on year. It nosedived in 2007-8 eradicating most of the gains

between 2010-2015 the economy grew at 2% and grew again by more than 2% in the years 2016-2022, except for 2020 when it nosedived, eradicating a lot of the gains in the previous years.

The economy is larger now than it was in 2002, 2010 and 2015.

Not true according to this, there’s a reason why it “nosedived” in 07/08, and moreso in 08/09, - and why it did in 19/20 followed by a rise we wouldn’t have seen in normal circumstances that Johnson was always crowing about.

https://www.macrotrends.net/countrie...dp-growth-rate

[HiVis]

Not true according to this, there’s a reason why it “nosedived” in 07/08, and moreso in 08/09, - and why it did in 19/20 followed by a rise we wouldn’t have seen in normal circumstances that Johnson was always crowing about.

https://www.macrotrends.net/countrie...dp-growth-rate

the UK economy was $1.78trn in 2002, in 2010 it was $2.482trn, and in 2015 it was $2.933trn. In 2020 it was $2.748trn with a rise of around 7.5% to $2.953trn in 2021.

We know the reason it nosedived in 2007/8/9, like we know the reason it nosedived in 2020. I'm not making comment on either, I'm just stating what happened. I doubt it very much that different governments would have made any difference in either event.

[SLUDGE FACTORY]

the Guardian is centre left.

It's a Liberal paper . It was founded as a Liberal supporting paper in Manchester . In the brown v Cameron head to head it sided with clegg . Then slagged off the liberals for not getting enough votes to form a coalition with Labour.

I have never forgiven the tossers .

[az city]

I’d have to agree. I was half thinking (well, hoping) Truss was being strategic in her messaging during the leadership election, given the make up of the “electorate”, to then become a bit more pragmatic in the short term once in office given the realities of governing in the current economic moment and a general election which isn’t that far away. Essentially, using her leadership bid to roll the pitch for a programme to run on at the next general election once inflation may have been tamed.

I’ve been surprised at the silence since last week’s fiscal event. The lack of reassurance through messaging and explanation isn’t helping with market volatility and does make me question if this has come as a greater surprise to the government than anticipated, although it shouldn’t have.

There's a rumour circulating that the BoE's hurried intervention is to prevent a complete meltdown of the UK financial system.

I am beginning to think they (Truss and Sunak) actually believed what Minford told them in coming up with this idiocy. (For reference, Minford is an 80 year old, rather confused, academic (Cardiff University) who was behind a lot of Thatcherism and Brexit and has reputation for being very wrong most of the time.)

[az city]

All a load of bollocks. And pretty much everyone knows it. The only thing they’ll invest in (if they don’t just hoard the wealth) will be properties. Less houses on the market means higher house prices and higher rent for us plebs. Landlords are just a richer version of the pricks that scalp tickets.

https://academic.oup.com/ser/article/20/2/539/6500315

[az city]

between 2002-2007 the economy grew by 2.9% year on year. It nosedived in 2007-8 eradicating most of the gains

between 2010-2015 the economy grew at 2% and grew again by more than 2% in the years 2016-2022, except for 2020 when it nosedived, eradicating a lot of the gains in the previous years.

The economy is larger now than it was in 2002, 2010 and 2015.

Point of order here - if growth rates fall it doesn't necessarily mean the economy is smaller in absolute terms.

[Dorcus]

There's a rumour circulating that the BoE's hurried intervention is to prevent a complete meltdown of the UK financial system.

I am beginning to think they (Truss and Sunak) actually believed what Minford told them in coming up with this idiocy. (For reference, Minford is an 80 year old, rather confused, academic (Cardiff University) who was behind a lot of Thatcherism and Brexit and has reputation for being very wrong most of the time.)

100% correct!

By the way, it.looks like right wing fantasy and lunacy is showing no signs of abating any time soon.

I just read that "respected" Brexit worshipping guru Daniel Hannan has reportedly suggested that the damaging market turmoil of the past few days has absolutely nothing to do with the Truss/Kwarteng mini budget. He says it's all to do with market reaction to and fear of the increased likelihood of an incoming Labour government! 😲

Well he was spot on about the wonderful benefits Brexit would bring us so does he know something even leading economists don't and perhaps he's bang on the money again?

[HiVis]

Point of order here - if growth rates fall it doesn't necessarily mean the economy is smaller in absolute terms.

I don't think anyone has suggested it has.

[HiVis]

There's a rumour circulating that the BoE's hurried intervention is to prevent a complete meltdown of the UK financial system.

I am beginning to think they (Truss and Sunak) actually believed what Minford told them in coming up with this idiocy. (For reference, Minford is an 80 year old, rather confused, academic (Cardiff University) who was behind a lot of Thatcherism and Brexit and has reputation for being very wrong most of the time.)

Perhaps you forget the QE from ten years ago, this buy back of gilts was always going to happen, it just so happens to be happening now. Poor political timing, of course. But pretty much planned. And it makes the lesser educated feel as if the Tories are to blame, which isn't a bad thing.

The BoE is planning that the gilt buyback will reduce inflation as liquidity is removed from the system. I doubt the markets will be affected as this buy back will have already been factored into long bond pricing.

[az city]

Perhaps you forget the QE from ten years ago, this buy back of gilts was always going to happen, it just so happens to be happening now. Poor political timing, of course. But pretty much planned. And it makes the lesser educated feel as if the Tories are to blame, which isn't a bad thing.

The BoE is planning that the gilt buyback will reduce inflation as liquidity is removed from the system. I doubt the markets will be affected as this buy back will have already been factored into long bond pricing.

Sorry? You're claiming the panicky buyback of gilts today was planned years ago? What have you been smoking?

[az city]

I don't think anyone has suggested it has.

Actually it was you who suggested the economy had "nosedived" earlier today. Maybe you were being imprecise?

[dandywarhol]

The Bank of England was forced to take emergency action today in a desperate attempt to stabilise the UK economy to stop mass insolvencies of pension funds today, it has been claimed. Earlier today, the BoE announced it would be carrying out "temporary purchases of long-dated UK government bonds" after Kamikaze Kwarteng's mini-budget announcement last week sent the value of the pound plummeting.
remortgage rates at 4/5 %.