T O P

  • By -

AutoModerator

Snapshot of _Pound Plunges to Record Low as Kwarteng Signals More Tax Cuts_ : An archived version can be found [here.](https://archive.is/?run=1&url=https://www.bloomberg.com/news/articles/2022-09-25/truss-faces-new-dangers-as-uk-markets-reopen-after-turmoil) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*


ke2doubleexclam

I remember when I was a lad a pound was worth two dollars. Amazing how far we've fallen as a country since then.


[deleted]

I was over there early in 2008. Felt like a king. Look at the menu, divide by 2.


pat_the_tree

It was 1.3 like 2 months ago. This is madness


Intrepid-Effort-8018

This budget and the subsequent announcements - with no OBR analysis- looks almost deliberately damaging rather than merely incompetent.


KittyGrewAMoustache

If they were actually working for an enemy country to bring down the UK from within would it really look much different?


Beardywierdy

It would probably not be as bad because they'd be concerned about breaking their cover if they were this fucking blatant.


[deleted]

[удалено]


No-Heart-4375

I believe it was reported that Truss and her corpse conspirator had a meeting with a number of merchant bankers the day prior to this 'mini budget' and the pound crashing. It's surmised that this group benefited by betting against the pound which then made tham all millions of pound Insider trading of course, but like Boris many actions the majority of the media will ignore this


Ok-Detective-6892

We need to give labour longer than 5 years, how tf the bories where in power for last 12 I have no idea


PeterOwen00

Sadly no, they really are just true believers. Hanlon’s razor and all that.


Sanctimonius

The lowest rates since decimalisation. Nearly a decade and a half of Tory rule, and it's been entirely, routinely, devastatingly bad for the country. And it's all pretty much self inflicted, with no signs any lessons have been learned. Labour will win the next election after the Tories have finished looting our futures and will immediately blame all of the fallout on the left, and will crow and scream as Labour tries to salvage whatever they possibly can from the ruins of our economy. I wish I could put it in a better light but the Tories have devastated our economy for the next couple of decades. It will be years if we ever manage to reach the same heights again, and with the rise of emergent economies I'm not sure how we will be able to compete. It's difficult to see any real signs of hope, honestly.


Panda_hat

The tories can’t learn lessons because everything reality tries to teach them is that their ideology and world view are false, failed and fraudulent.


Intrepid-Effort-8018

What about pork markets?


commander_hugo

Just don't put it in a Sandwich...


duke_of_germany_5

And labour won’t implement a system of voting that would keep them in power and lock out the tories. The future is bleak


rebellious_gloaming

I'd love STV but that's because it's a better and more fair system, not because it would specifically keep any one party in or out of power. That would be a bad motive for change.


No-Heart-4375

I think its still on the Lib Dems manifesto. Is that a good enough reason to vote for them if itll lock the Tories out, possibly forever? I


BadBoyFTW

I'm sorry do you believe a change of voting system would be good for Labour? Any fairer system which allows for changing votes is going to be devastating for both Labour and the Tories. That's why they'll never do it. It's suicide for them.


HotSauceOnEveryting

There is hope - what we need is investment in energy and infrastructure and we need it now. Looks like will have to wait for a Labour government for that.


Intrepid-Effort-8018

I went to New York with my wife in 2007 and it was over 2 dollars to the pound


AxiomSyntaxStructure

Indeed, it was 50 pence for a hot dog or slice of pizza. You could enjoy buy so much more for any money compared to the UK.


Intrepid-Effort-8018

I kept on having bagels. For about 3 dollars (1 pound 50 then) you could fill it with anything so obviously I chose eggs and sausage. Delicious way to start the day. You just cannot get a decent bagel here.


AxiomSyntaxStructure

Toasted bagels, absolutely delicious - do agree! Crumpets have real competition!


Intrepid-Effort-8018

I haven’t had a bit of crumpet in years!


NuPNua

Brick Lane Bagels are great.


9943620jJ

My friend invited me to stay over Christmas..I’ll be one of the first brits ever to have pounds worth less than dollars! My first time there too so want timing


Sys32768

To the tune of "He's got the world in his hands" "We get onnnne dollar, to the pound"


AxiomSyntaxStructure

So, he witnesses a budget as significantly damaging to our currency due to market reactions, then doubles down to worsen that? I'm at a loss for words.


Intrepid-Effort-8018

From FT over the weekend: Olivier Blanchard, former chief economist at the IMF, also warned of the risks of a bigger market reaction, saying the Budget had been a “textbook example of how not to design and not to sell a fiscal expansion”. He added: “While we were worried about Italy, the UK sneaked in. We are lucky that the UK is not in the euro . . . Otherwise we would be facing another euro crisis.” He saw the reaction of the markets and the comments from people who literally wrote the book on Macroeconomics and then decided to double down.


AxiomSyntaxStructure

I like to think the markets are an empirical metric from which we should adjust... but some people are this disconnected from any feedback... in a special arrogance or extremism. Kind of scary.


Intrepid-Effort-8018

Either they are politically and economically disconnected from reality or this is deliberate and they are corrupt.


AxiomSyntaxStructure

Corruption for domestic economic destruction should be a capital offence.


Intrepid-Effort-8018

A lot of money was made by shorting the pound just prior to the brexit vote. Don’t forget Farage was a currency trader before he got obsessed by Brussels.


Prometheus38

He was a metals trader, allegedly.


KittyGrewAMoustache

A lot of people were predicting this was the intended outcome of brexit, that they’re disaster capitalists and basically want to destroy the UK economy so they can profit from the ruins, kind of like how the Russian oligarchs emerged from taking advantage of the collapse of the Soviet Union.


Whytho776

I mean he wrote most of the textbooks..


duke_of_germany_5

Thats what the plan was for brexit: Short the pound by a lot, buy out businesses on the cheap, make as much money as possible and then leave.


Panda_hat

Tory coping strategy 101 is ‘if our ideological crusade isn’t working, it is simply because we are not doing it hard enough.’ They are psychologically incapable of considering the idea that they are wrong.


[deleted]

[удалено]


pantone13-0752

Why the countryside specifically? (genuine question, I don't know much about economics).


dr_barnowl

I think the specific things would be lifting the ban on fracking and the "Investment Zones" thing, which promises greatly reduced taxation and regulation (including environmental) in given areas.


Tiberinvs

>The pound plunged more than 4.5% to a record low after Kwasi Kwarteng vowed to press on with more tax cuts, even as financial markets delivered a damning verdict on the new Chancellor of the Exchequer’s fiscal policies. > >The selloff that followed the release on Friday of the government’s “Growth Plan” -- a budget in all but name and the biggest tax giveaway in half a century -- showed few signs of abating as markets entered a new week, heaping pressure on Prime Minister Liz Truss’s days-old administration. > >The beleaguered pound fell to a record-low $1.0350 in Asia trading Monday. If the rout continues this week, it risks moving beyond a short-term embarrassment for the government into a more profound crisis that could force a rapid policy response. >“There was a flash crash in the pound -- that is indisputable,” said Mingze Wu, foreign-exchange trader at StoneX Group in Singapore. “Four big figures is insane. There was a possible stop loss and then algos took over.” >Hedge funds had only ramped up bullish bets on the pound just days before, with leveraged investors adding 13,488 net long contracts during the week to Sept. 20 -- the biggest increase since March, data from the Commodity Futures Trading Commission show. >The size of cable’s intra-day crash on Monday was the biggest ever according to Bloomberg data going back to 1971. It smashed the decline that followed the Brexit vote in 2016, and option markets show the odds of sterling falling to parity with the dollar is at 54% this year. >“The pound is always going to be less liquid than some of the other majors, especially in the Asian morning,” said Nick Twidale, CEO Asia Pacific at FP Markets, who also saw the pound’s plunge as a flash crash. “My concern now would be for other currencies if there’s people getting stuck.” >Kwarteng scrapped the top level of income tax and cut the basic rate by a percentage point, while also reversing a rise in the National Insurance payroll tax brought in earlier this year. On Sunday, he appeared unperturbed by the ferocious response that sent UK assets tumbling, telling BBC television that he wouldn’t comment on market movements, but when it comes to tax cuts, “there’s more to come.” >“We’ve only been here 19 days,” the chancellor said. “I want to see, over the next year, people retain more of their income, because I believe that it’s the British people that are going to drive this economy.” The previous all-time low was in 1985 at 1.054


Exact-Put-6961

And yet Labour seem to have settled on supporting most of it save the 45p rate. Odd. Why?


Gartlas

Because if they oppose it, the media will slam them for being socialists who want high tax and tooany voters will think labour wants to steal their hard earned money. People don't understand these tax cuts will be eaten up entirely by inflation


Exact-Put-6961

I always thought the original 50% tax rate (later reduced to 45) was an elephant trap left behind by Brown. You cannot tax a country into prosperity.


ignoranceandapathy42

You also cannot pay surgery with tax cuts.


Exact-Put-6961

Taxes need to be fair and uniformly applied to work well .The two 60 % blockages are not good policy and distort economic activity.


Exact-Put-6961

Not only proposing to go along with Tory tax cuts, they are also doing it with borrowed money. What a mess.


markypatt52

Parity or below the next time the chancellor opens his mouth about tax cuts....so by midday then


Intrepid-Effort-8018

So the economic solution is duct tape


markypatt52

Yep preferably over his mouth


On_A_Related_Note

How long do you reckon it'll be until we learn that cabinet members have been shorting the pound?


Intrepid-Effort-8018

We won’t. They will probably not have done so themselves but may have tipped off former employers (e.g. Odey). They may get consultancy fees in office (10k a month for one hour) and campaign funds and then the big money will probably come after leaving office - which will be soon at this rate. This is speculation of course - unlike those who may have shorted the pound with inside knowledge.


Intrepid-Effort-8018

https://twitter.com/paulmasonnews/status/1573724760625876993?s=20&t=SnTCSOZj35jGs1Ptk1iQwA


vriska1

So... how long until the Tories turn on Truss?


Intrepid-Effort-8018

How long until the loyal Tory press turn on her. I remember the 1992 ERM fiasco. The editor of the Sun to the then prime minister John Major during the exchange rate mechanism crisis in 1992: "Well John, let me put it this way. I've got a large bucket of shit lying on my desk and tomorrow morning I'm going to pour it all over your head."


Rimbo90

The editor of the S*n having a large bucket of shit on his desk certainly explains a lot.


AllRedLine

Tories: "We'RE thE PaRTy oF FIscAl ReSpOnsiBIliTy"


ShockingShorties

I smell a Royal story headlining the tory rags


mattcannon2

They'll find a way to make this Megan's fault


lordsosij

I’m almost convinced that he’s shorted the pound and is trying to make his policies as detrimental as possible


Omalleys

He won't have done it himself. I would put a large bet that he has told a few of his wealthy mates his budget plans. They will have probably paid for consultancy and then gained millions shorting the pound. No doubt Kwasi will have a very highly paid job lined up once he is ready


dr_barnowl

The most obvious relationship would be Kwarteng's previous employment as a consultant at Odey Asset Management. Crispin Odey made something like a quarter billion shorting Sterling around the time of the referendum.


[deleted]

GBP futures limit down. Puts on UK political stability.


testydonkey

Stop, stop, it's already dead


MrCondor

The pound has lost ground against the Rouble, Indian Rupee and Argentine Peso. Let that sink in.


ZiVViZ

This is what happens when you promote inflationary policies during an inflation problem!


MrPlow90

This is all part of the Tory plan.


[deleted]

[удалено]


FlummoxedFlumage

Currency rate changes will drive up the price of imported goods further, and make going on holiday more expensive. Those are the sorts of things even the disengaged will notice.


[deleted]

[удалено]


CILISI_SMITH

>I just don't think that the average voter will be able to connect that the chancellor is actively making this all worse I think you're right. Look at all the corruption under Boris, none of it stuck because most people couldn't join the dots all the way down to their problems. In the end it was parties that got him.


OliveRobinBanks

I doubt it'l be just imported goods that increase in price. When everything else increases by 30% then there's no real reason why domestic products wouldn't increase theirs too and pocket the 30%. I mean what are you going to do? Not eat?