13 October 2022 - Prime Minister defies OBR

Beyond Currency

Prime Minister Liz Truss has somehow found Theresa May’s magic money tree as she claims that there will be no cut to public spending to balance the books following the recent announcement of tax cuts. She may simply be so drunk on power that she believes that she has an unlimited mandate. So far, the latter has been proved untrue as she has been forced to U-turn over the abolishment of the top rates of income tax, faces a rebellion over a rise in the rate of benefits and is accused of a lack of basic economic skills. Yesterday’s announcement that there will be no reduction in public spending despite the Office for Budget Responsibility’s report of a £60 billion deficit should planned tax cuts go unfunded. Jacob Rees-Mogg, every Labour MPs favourite pantomime villain, seems to glory in being the archetypical Tory. He was fierce in his criticism of Andrew Bailey, blaming him for the chaos in the financial markets recently. He appears to have confused the current programme of short-term interest increases with the rises in long-term rates as the Central Bank defended the prospect of gilt fire sales.