I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
If you are correct then Starmer's government will not last two years as I cannot see how it is not a minority one with SNP/Liberals providing some kind of confidence and supply. They will pull the plug quite soon I reckon if things are as bleak as you say on spending front.
Geidt has concluded his investigation into Rishi Sunak’s interests, confirming he’s found no wrong-doing:
“Considering the Card against the specific responsibilities of the Chancellor’s ministerial offices subsequent to his first role, I do not consider that its possession would constitute an inherent conflict of interest…. I advise that the requirements of the Ministerial Code have been adhered to by the Chancellor, and that he has been assiduous in meeting his obligations and in engaging with this investigation.”
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
I disagree about a bond buyer strike.
The problem is the lack of a coherent plan from Johnson/Rishi. As you say, Osborne put forward something credible and the market went for it.
The next government needs a credible plan.
There is already something of a strike compared to expected demand at our credit rating, I expect it to get worse and if Labour are in power it could get really, really bad.
One of the reasons I think Rishi is keeping quiet is that he's realised if he turns on the spending taps the big bond funds will go on strike as they see no credible plan that the UK will enforce fiscal discipline.
He (and the BoE) also have the problem that the unusually high inflation is imported, due to external factors, and mostly on essentialsn goods. Interest rates would have to rise considerably, before there would be any effect on the inflation rate.
The only levers the Chancellor has left, are raising taxes and cutting spending.
The problem is severe, and is to some extent only masked by the Eurozone having even bigger problems of their own.
"Labour 'could struggle to make gains' at local elections despite Boris's Partygate woes as experts say Starmer faces tough task to beat 2018 performance
Keir Starmer is warned Labour will struggle to make gains at the local elections Most of the council seats being fought for next week were last contested in 2018 The results 4 years ago were a high water mark of Labour’s recent performance Election gurus suggest Sir Keir will do well to avoid an 'underwhelming' result"
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
Maybe that is why Rishi has kept a low profile and rejected Boris and the cabinet's demands for more spending
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
Yes, let's pretend there aren't any things that need to be paid for and then we can give ourselves a big tax cut and go on a spending spree with a clear conscience ...
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
If you are correct then Starmer's government will not last two years as I cannot see how it is not a minority one with SNP/Liberals providing some kind of confidence and supply. They will pull the plug quite soon I reckon if things are as bleak as you say on spending front.
I think Labour will win a working majority in 2024 (and my book is aligned to that view) and they'll inherit a crashing economy, high inflation and a very short window to present a credible spending plan to keep money markets on side. They will need to present an emergency budget which outlines £100bn-120bn in fiscal drag on the current budget, essentially holding spending at a 1-2% annual rise while taxes increase at 3-5% and attempt to sell that to the public as "increasing spending" as the Tories did in 2010.
I think accusations of lying are serious allegations and should be taken seriously. ie always investigated with significant penalties either on the lying parliamentarian or the false accuser. The current situation is a nonsense where accusations of lying must always be retracted because parliamentarians never lie.
I happened to be driving when PMQs was on today. Blimey, it was tedious. SKS is so dull. No doubt his repeat at the end of every question sounded powerful in his bedroom mirror this morning but there was no bite in it whatsoever. Boris just blusters away repeating the same half relevant statistics time and again without addressing the question. Blackford is utterly tedious and sanctimonious. Ed Davies didn't even bother to turn up which was a good call by him.
Would this be any better if they were also calling each other liars? Probably not. It is undignifed and pointless already.
Listening to PMQs today made you want to sack the lot and start again with decent honest and sensible politicians
It is so depressing
The problem is what capable person would want to be a politician these days with the restrictions and spotlight on your life for little reward
That’s already a big problem in the age of social media, and likely to become even more so in the future.
We already saw a couple of weeks ago, that the personal finances of an MP’s spouse are now fair game for the front pages. That story alone, likely put off dozens of decent people from standing for political office.
People aged 30 now, have been on social media and carrying digital cameras everywhere since they were 17, probably behaving like teenagers did. Their friends from years back will all have photos and videos of all sorts of things that are now considered problematic.
On balance, this mechanism would deter disproportionately more non-decent people. That would be a good thing, overall. However, in reality, people are happy to vote for politicians who behave outrageously, lie, etc.
Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
Yes, let's pretend there aren't any things that need to be paid for and then we can give ourselves a big tax cut and go on a spending spree with a clear conscience ...
Wwwwhhhhhhoooooooppppeeeeeeeeeee!
Since you're always the smartest guy in the room, explain the alternative. Please, I'm interested to know what the brain of Britain thinks.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Irrespective, we are where we are and as far as I can tell the UK faces years of difficult financial decisions and where if labour form a government they will need urgently to learn one word to spending demands - No
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
Maybe that is why Rishi has kept a low profile and rejected Boris and the cabinet's demands for more spending
How can Sunak stand there and ask ordinary people for money when the adminstration he ran was wide open to mass fraud on a huge scale? if he was a charity or a business he would have been wound up years ago surely?
I wonder whether the May elections might show voters have no confidence not just in the government, but in those who would replace them.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Irrespective, we are where we are and as far as I can tell the UK faces years of difficult financial decisions and where if labour form a government they will need urgently to learn one word to spending demands - No
I happened to be driving when PMQs was on today. Blimey, it was tedious. SKS is so dull. No doubt his repeat at the end of every question sounded powerful in his bedroom mirror this morning but there was no bite in it whatsoever. Boris just blusters away repeating the same half relevant statistics time and again without addressing the question. Blackford is utterly tedious and sanctimonious. Ed Davies didn't even bother to turn up which was a good call by him.
Would this be any better if they were also calling each other liars? Probably not. It is undignifed and pointless already.
Listening to PMQs today made you want to sack the lot and start again with decent honest and sensible politicians
It is so depressing
The problem is what capable person would want to be a politician these days with the restrictions and spotlight on your life for little reward
That’s already a big problem in the age of social media, and likely to become even more so in the future.
We already saw a couple of weeks ago, that the personal finances of an MP’s spouse are now fair game for the front pages. That story alone, likely put off dozens of decent people from standing for political office.
People aged 30 now, have been on social media and carrying digital cameras everywhere since they were 17, probably behaving like teenagers did. Their friends from years back will all have photos and videos of all sorts of things that are now considered problematic.
On balance, this mechanism would deter disproportionately more non-decent people. That would be a good thing, overall. However, in reality, people are happy to vote for politicians who behave outrageously, lie, etc.
No, it deters decent people who fear that every teenage night out more than a decade ago can become the next scandal, with them waking up one Sunday morning to find half of Fleet St harassing their spouse and children as they take the dog for a walk.
I think accusations of lying are serious allegations and should be taken seriously. ie always investigated with significant penalties either on the lying parliamentarian or the false accuser. The current situation is a nonsense where accusations of lying must always be retracted because parliamentarians never lie.
The gas contract states paying in Euros or Dollars I thought? The German people won't tolerate that surely? It would be bordering on national humiliation.
It does indeed.
And the Germans would be well advised to hang tough. It would be far from costless for the Russians to have to shut down gas production, and could damage their reservoirs.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
I don’t think the UK is in a position to cut its way towards prosperity. The pips were squeaked in the years after 2010, and a decent chunk of the deficit is still the hangover from the prolonged shutting down of the economy we endured to save the over 60s.
Rather, the burden of taxation needs to shift from producers to rentiers (like me); ie from income to wealth.
In turn, the focus of government spend needs to be balanced towards capital investment. That alone will feel like austerity given that the money must be found from social spending.
We also need immigration - more of it - to relieve demographic challenge, but it must be twinned with profound changes to the planning and housebulding regime.
The gas contract states paying in Euros or Dollars I thought? The German people won't tolerate that surely? It would be bordering on national humiliation.
It does indeed.
And the Germans would be well advised to hang tough. It would be far from costless for the Russians to have to shut down gas production, and could damage their reservoirs.
We can offer to help with the damage if they like?
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
Belatedly reading my Eye of a few weeks ago. Reports an audit analysis of UKG spending decisions on PPE for NHS England compared with one of the devolved nations, whose admin was nasty and suspicious and did things like checking bona fides and sendiing people to overseas factories. The latter made very substantial savings compared to the English NHS from very simple measures. from a few percent up to half or so, depending on what was bering bought - glovces or gowns or masks or whatever. Those add up to very large sums in real money.
"Labour 'could struggle to make gains' at local elections despite Boris's Partygate woes as experts say Starmer faces tough task to beat 2018 performance
Keir Starmer is warned Labour will struggle to make gains at the local elections Most of the council seats being fought for next week were last contested in 2018 The results 4 years ago were a high water mark of Labour’s recent performance Election gurus suggest Sir Keir will do well to avoid an 'underwhelming' result"
The pendulum of expectations management swings back.
Surely it pays to be wary of the notion that just because voters don't want the tories, they must want labour.
Bizarre. It’s the mail helping Labour lower expectations ahead of their flop next week?
The argument was the same in the New Statesman piece, it’s an election in Labour areas and they got the vote out last time so there’s little much further for Labour to go. Borne out by the fact despite big lead in London how much further it can swing since last time is minuscule.
Poppycock. I’m not buying it. If Labour can’t give the Tories a damn good thrashing next week in this climate with this political narrative then it exposes how uninspiring Starmer’s New Labour actually is.
For sure Libdems and greens will have fun at Tory expense next week, if Labour can’t go a long way forward against Tories in direct seat and council swaps, in fact go backward against the greens, then it is without any doubt a bad night for Starmer’s Labour.
The person who runs this account claims to be an ex-spook who’s now an ‘ethical leaker’. Certainly very anti the current government. Also claims to have contacts in No. 10.
How true all that is, I don’t know. But I have my doubts.
But, if this turns out to be accurate, maybe I’ll have to accept they are who they say they are:
The idea that Raab, or indeed anyone, would deliberately watch pornography in the Commons chamber simply doesn't pass the sniff test. Why would anyone do that?
What might have happened is someone texted/WhatsApped something NSFW and they opened the message before realising what it was.
Maybe he was the Mail on Sunday's mole? He fantasised that the star in his movie was Angela Rayner!
I wonder if one of the other MPs filmed the errant male member (whomsoever that might have been)?
You may wish to rephrase 'errant male member'.
Anyway, I have it on good authority that the MP in question wasn't actually watching porn, but was watching a scene from a film called Basic Instinct so that he felt better informed about a story in the MoS.
Basic Instinct?
I’m assuming that’s the working title of the next Labour manifesto?
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
If you are correct then Starmer's government will not last two years as I cannot see how it is not a minority one with SNP/Liberals providing some kind of confidence and supply. They will pull the plug quite soon I reckon if things are as bleak as you say on spending front.
I think Labour will win a working majority in 2024 (and my book is aligned to that view) and they'll inherit a crashing economy, high inflation and a very short window to present a credible spending plan to keep money markets on side. They will need to present an emergency budget which outlines £100bn-120bn in fiscal drag on the current budget, essentially holding spending at a 1-2% annual rise while taxes increase at 3-5% and attempt to sell that to the public as "increasing spending" as the Tories did in 2010.
The Labour line in this event will have to be - "Hard choices. No magic money tree. Clearing up the Tories' mess. Trouble with the Conservatives is they always end up running out of other people's money."
Uprating by 8% instead of 4% increases the compound rate in future years,
No it doesn't. You return to whatever the price index (not the increase in the index) is next year.
How does that make sense, the welfare budget is £100bn, you're uprating by 4% so it increases to £104bn, next year you uprate by 5% so it becomes £109.2bn, alternatively you uprate by 8% this year so it increases to £108bn, next year you uprate by 5% as before so it becomes £113.4bn, using 8%, even as a one off, will have a huge lasting effect on the benefits bill.
It's not cost free and it's not a one off and you still have no way to pay for it other than begging the bond markets for money.
You don't uprate it by 5% next year. All you are doing is paying some of next year's increase early, so the uprate next year is less (in your example, you increase the total bill next year by £1.2bn).
Richard that's horrifically naive of you. Inflation at 5% in September "Nasty Tories uprate benefits by just 1% attacking the poorest".
All that happens is you create a new baseline at the higher rate, it's like tax, once they're introduced it's extremely difficult to get rid of them. That Osborne managed to get rid of the damaging 50% rate was a minor miracle, if only he'd also dumped the completely counter productive £100-125k tax free withdrawal band.
There's simply no way that the government could uprate benefits by just 1% with inflation at over 5%, even if there was a bringing forwards of the next rise. Honestly, I'm surprised you've fallen for Johnstone's idea, he's been an incredibly disappointing IFS head and he'd be the first person calling the following 1% rise unfair.
Richard is right on the detail.
Max is possibly right on the politics.
The problem is that benefits are uprated on out-of-date CPI stats, so when we get a massive surge in inflation the rates take 12 months to catch up.
2022-23 rates - based on the 12 months to September 2021 2023-24 rates - based on the 12 months to September 2022
I think the rates should use the most recent 12 months. Or perhaps be adjusted every 6 or 3 months. It's really unfair to ask claimants to wait for a whole year for their benefits to catch up with inflation.
It's a very unusual situation, with such a dramatic change in the inflation rate in just a few months.
Irrespective of the presentational point, the simple fact is that those dependant on benefits are going to have enormous problems paying for basic necessities. That should be addressed.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
Oh wait, it's the opposition's fault that the government instituted a policy that small children in Hartlepool many PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?
Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
The person who runs this account claims to be an ex-spook who’s now an ‘ethical leaker’. Certainly very anti the current government. Also claims to have contacts in No. 10.
How true all that is, I don’t know. But I have my doubts.
But, if this turns out to be accurate, maybe I’ll have to accept they are who they say they are:
The idea that Raab, or indeed anyone, would deliberately watch pornography in the Commons chamber simply doesn't pass the sniff test. Why would anyone do that?
What might have happened is someone texted/WhatsApped something NSFW and they opened the message before realising what it was.
I was on a plane once, and a gentleman a few rows ahead of me got his laptop out.
As he opened it, it came out of sleep mode, and continued playing the video be had been watching in his hotel room the previous evening. Unfortunately for him, the volume was loud, and the panting and moaning was heard by the entire plane.
He slammed the laptop shut and went a very bright red.
I rather liked one eminent PBer’s very honest account of (briefly) watching hotel porn on a business trip. From memory, he flicked on the ‘free’ six minutes, got bored and went back to his copy of The Times, forgetting to stop the porn feed. Next morning was landed with a bill and a head scratch about how to administer the expense…
DJ Tim Westwood steps down from his show until further notice
Why has this broken now. There have been rumours about Westwood for YEARS.
Strange to think that his father was a Bishop.
He’s no longer working for the BBC now, that’s why it has just come out.
BBC DJs, like MPs, are assumed to be honourable people.
I don't disagree with you that the BBC has a dreadful record on dealing with the behaviour of the "talent". But that doesn't really answer the question of why it came out now, as Westwood didn't just leave the Beeb recently - he's not been there for the best part of 10 years.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
The person who runs this account claims to be an ex-spook who’s now an ‘ethical leaker’. Certainly very anti the current government. Also claims to have contacts in No. 10.
How true all that is, I don’t know. But I have my doubts.
But, if this turns out to be accurate, maybe I’ll have to accept they are who they say they are:
The idea that Raab, or indeed anyone, would deliberately watch pornography in the Commons chamber simply doesn't pass the sniff test. Why would anyone do that?
What might have happened is someone texted/WhatsApped something NSFW and they opened the message before realising what it was.
I was on a plane once, and a gentleman a few rows ahead of me got his laptop out.
As he opened it, it came out of sleep mode, and continued playing the video be had been watching in his hotel room the previous evening. Unfortunately for him, the volume was loud, and the panting and moaning was heard by the entire plane.
He slammed the laptop shut and went a very bright red.
I rather liked one eminent PBer’s very honest account of (briefly) watching hotel porn on a business trip. From memory, he flicked on the ‘free’ six minutes, got bored and went back to his copy of The Times, forgetting to stop the porn feed. Next morning was landed with a bill and a head scratch about how to administer the expense…
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
No doubt, yet Japan also has a huge domestic bias in bond buyers and in some cases buying bonds is seen as a way to support the nation state. I don't see the same attitude in the UK.
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The turnaround over the last few weeks has been interesting to watch. Feels very much like the party is over and everyone knows hard times are ahead. I wonder if this is how 2007/8 felt as well within financial companies.
I happened to be driving when PMQs was on today. Blimey, it was tedious. SKS is so dull. No doubt his repeat at the end of every question sounded powerful in his bedroom mirror this morning but there was no bite in it whatsoever. Boris just blusters away repeating the same half relevant statistics time and again without addressing the question. Blackford is utterly tedious and sanctimonious. Ed Davies didn't even bother to turn up which was a good call by him.
Would this be any better if they were also calling each other liars? Probably not. It is undignifed and pointless already.
Listening to PMQs today made you want to sack the lot and start again with decent honest and sensible politicians
It is so depressing
The problem is what capable person would want to be a politician these days with the restrictions and spotlight on your life for little reward
That’s already a big problem in the age of social media, and likely to become even more so in the future.
We already saw a couple of weeks ago, that the personal finances of an MP’s spouse are now fair game for the front pages. That story alone, likely put off dozens of decent people from standing for political office.
People aged 30 now, have been on social media and carrying digital cameras everywhere since they were 17, probably behaving like teenagers did. Their friends from years back will all have photos and videos of all sorts of things that are now considered problematic.
On balance, this mechanism would deter disproportionately more non-decent people. That would be a good thing, overall. However, in reality, people are happy to vote for politicians who behave outrageously, lie, etc.
The threat of your (or your partner's) dodgy deals may stop a non-decent people from becoming MPs but the numbers are already well down because of Social Media and the 24 hour access people believes it gives them.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
No doubt, yet Japan also has a huge domestic bias in bond buyers and in some cases buying bonds is seen as a way to support the nation state. I don't see the same attitude in the UK.
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
My point was actually a little different. In Japan the central bank has made it very clear that it will step in and buy JGBs to avoid interest rates getting too high. It is possible that our government does the same. (Indeed, one could argue that it is the path of last resistance for the government, as it avoids a situation where mortgage rates are rising at the same time as other prices.)
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
Largely agree, but I am concerned that borrowing is nearly maxed out, not just on repayment affordability grounds but also given inflation.
I would argue to fund via 2/3 reallocation of current spend, 1/3 extra borrowing. Something like that.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
No doubt, yet Japan also has a huge domestic bias in bond buyers and in some cases buying bonds is seen as a way to support the nation state. I don't see the same attitude in the UK.
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
My point was actually a little different. In Japan the central bank has made it very clear that it will step in and buy JGBs to avoid interest rates getting too high. It is possible that our government does the same. (Indeed, one could argue that it is the path of last resistance for the government, as it avoids a situation where mortgage rates are rising at the same time as other prices.)
Hmm, Bailey may be weak but I doubt the Treasury could direct him to restart QE during a period of very high inflation. He's not that weak.
Could a quasi-qualified PB lawyer please give us some learned commentary re: parliamentary privilege in UK as it relates to journalists & publishers cited for contempt for what they've published?
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan, didn't have a Lockdown or a government that was spending like a drunk sailor for 2 years, so it does not have inflation now,
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
No doubt, yet Japan also has a huge domestic bias in bond buyers and in some cases buying bonds is seen as a way to support the nation state. I don't see the same attitude in the UK.
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
My point was actually a little different. In Japan the central bank has made it very clear that it will step in and buy JGBs to avoid interest rates getting too high. It is possible that our government does the same. (Indeed, one could argue that it is the path of last resistance for the government, as it avoids a situation where mortgage rates are rising at the same time as other prices.)
Hmm, Bailey may be weak but I doubt the Treasury could direct him to restart QE during a period of very high inflation. He's not that weak.
Inflation, though, lowers the real value of the UK's debts. Why not keep interest rates low, and let bond holders take the hit?
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
I just don't see where you're getting the money from. At least in 2010 we had oodles of room for QE which the government used as a ladder out of the fiscal hole it dug for itself. We have little to no capacity for QE.
Additionally, talk of capital expenditure inevitably makes way for "our NHS". Anyone who thinks we could make current spending cuts to fund investment is kidding themselves.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
The only person I’ve seen citing concerns over UK debt is Rishi, because he needs an excuse that is not “growth has continually underperformed projections so we need to tax more”.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
Oh wait, it's the opposition's fault that the government instituted a policy that small children in Hartlepool many PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?
Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
If the tories run out of money and have to go to the IMF (and I am not saying they will), that is an extinction level event for the conservative party.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan, didn't have a Lockdown or a government that was spending like a drunk sailor for 2 years, so it does not have inflation now,
Actually they do, they have inflation for the first time in decades.
What is the deal with backbenchers getting called at PMQs, with special reference to the fact that I think Aaron bell has had Qs at 2 successive PMQs? I believe the conventional expression is "catching the Speaker's eye," but in practise this means what?
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
Not untrue but we are no longer in a free money, low inflationary environment. The debt servicing delta on a change in interest rates (for example on index-linked borrowing) means it will be quite spenny for the govt.
The person who runs this account claims to be an ex-spook who’s now an ‘ethical leaker’. Certainly very anti the current government. Also claims to have contacts in No. 10.
How true all that is, I don’t know. But I have my doubts.
But, if this turns out to be accurate, maybe I’ll have to accept they are who they say they are:
The idea that Raab, or indeed anyone, would deliberately watch pornography in the Commons chamber simply doesn't pass the sniff test. Why would anyone do that?
What might have happened is someone texted/WhatsApped something NSFW and they opened the message before realising what it was.
I was on a plane once, and a gentleman a few rows ahead of me got his laptop out.
As he opened it, it came out of sleep mode, and continued playing the video be had been watching in his hotel room the previous evening. Unfortunately for him, the volume was loud, and the panting and moaning was heard by the entire plane.
He slammed the laptop shut and went a very bright red.
I rather liked one eminent PBer’s very honest account of (briefly) watching hotel porn on a business trip. From memory, he flicked on the ‘free’ six minutes, got bored and went back to his copy of The Times, forgetting to stop the porn feed. Next morning was landed with a bill and a head scratch about how to administer the expense…
His story of collapsing onto the luggage carousel for a bit of shut-eye was 💯
Less amusing is case from few years back, when a woman on airplane noticed the guy sitting next to here was viewing child pornography via his personal "device".
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
Just like in Japan, right?
Japan didn't have runaway inflation, in fact given their issues it has allowed them to continue to monetise their debt well beyond what the UK is currently able to do.
Japan will have the same import cost inflation we do, and they also spend a greater proportion of their GDP on importing energy than we do.
No doubt, yet Japan also has a huge domestic bias in bond buyers and in some cases buying bonds is seen as a way to support the nation state. I don't see the same attitude in the UK.
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
My point was actually a little different. In Japan the central bank has made it very clear that it will step in and buy JGBs to avoid interest rates getting too high. It is possible that our government does the same. (Indeed, one could argue that it is the path of last resistance for the government, as it avoids a situation where mortgage rates are rising at the same time as other prices.)
Isn't it true though that Japan can rely on its economic base to keep the yen stable in that scenario?
The UK? Not so much. The market might test the UK's resolve there.
I think people get really silly about the 'impositions' of unparliamentary language, they lose all perspective and act like it is unpardonable, as if most debating chambers don't have rules on what can be said and how. Personally I think the benefits of at least trying to keep a lid on nothing but juvenille insults is worth it, especially as they can say whatever they like outside the chamber.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
The danger is that debt interest could swing rapidly with interest rate changes. While the Treasury has (as always) done a good job fixing long term gilt rates low, the impact of QE means there is a fair element that is effectively unfixed.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
Hmm, we did and we didn't. Around a third of gilts are index linked to CPI (or RPI for some older stock). That pushes up the debt interest bill very quickly.
The issue is te £120bn of new debt that we need to raise over the coming year and the £150bn or so that needs to be rolled over, all without the BoE buying up any new debt (and there's been talk of the QE stock being reduced and the £800bn of gilts not being renewed as it comes to term). In the coming financial year we will need to raise something like 15% of the current outstanding stock of debt and that's with favourable long dated gilts as you say.
That is a mammoth task and maybe you're right that the governor will cave and restart QE but it's a big gamble.
Uprating by 8% instead of 4% increases the compound rate in future years,
No it doesn't. You return to whatever the price index (not the increase in the index) is next year.
How does that make sense, the welfare budget is £100bn, you're uprating by 4% so it increases to £104bn, next year you uprate by 5% so it becomes £109.2bn, alternatively you uprate by 8% this year so it increases to £108bn, next year you uprate by 5% as before so it becomes £113.4bn, using 8%, even as a one off, will have a huge lasting effect on the benefits bill.
It's not cost free and it's not a one off and you still have no way to pay for it other than begging the bond markets for money.
You don't uprate it by 5% next year. All you are doing is paying some of next year's increase early, so the uprate next year is less (in your example, you increase the total bill next year by £1.2bn).
Richard that's horrifically naive of you. Inflation at 5% in September "Nasty Tories uprate benefits by just 1% attacking the poorest".
All that happens is you create a new baseline at the higher rate, it's like tax, once they're introduced it's extremely difficult to get rid of them. That Osborne managed to get rid of the damaging 50% rate was a minor miracle, if only he'd also dumped the completely counter productive £100-125k tax free withdrawal band.
There's simply no way that the government could uprate benefits by just 1% with inflation at over 5%, even if there was a bringing forwards of the next rise. Honestly, I'm surprised you've fallen for Johnstone's idea, he's been an incredibly disappointing IFS head and he'd be the first person calling the following 1% rise unfair.
Richard is right on the detail.
Max is possibly right on the politics.
The problem is that benefits are uprated on out-of-date CPI stats, so when we get a massive surge in inflation the rates take 12 months to catch up.
2022-23 rates - based on the 12 months to September 2021 2023-24 rates - based on the 12 months to September 2022
I think the rates should use the most recent 12 months. Or perhaps be adjusted every 6 or 3 months. It's really unfair to ask claimants to wait for a whole year for their benefits to catch up with inflation.
It's a very unusual situation, with such a dramatic change in the inflation rate in just a few months.
Irrespective of the presentational point, the simple fact is that those dependant on benefits are going to have enormous problems paying for basic necessities. That should be addressed.
Yes.
The opposite factor as inflation goes the other way will not help when needed, and if inflation collapses PDQ (heard a credible commentator saying 9 months) then there could be a net compound fall of 2-3%.
Similar thing going on with BJ's defence spending boost.
Could a quasi-qualified PB lawyer please give us some learned commentary re: parliamentary privilege in UK as it relates to journalists & publishers cited for contempt for what they've published?
Esp. including any modern cases?
No expert, but that's 2 different things there. Privilege attaches to things said in parliament by MPs and by witnesses to committees (I think) and means they can say whatever they want and not get sued, and the press can accurately report what they say and not get sued. Contempt is different, it is interfering with the business of parliament (i.e. it isn't saying I despise every single member of the HoC, and the Speaker is the biggest arse of the lot). MPs can commit it by misleading the House, not leaving the Chamber when ordered to by the Speaker etc. I can't see that the Rayner story constitutes ccontempt, nor turning down an invitation by the Speaker to meet.
Uprating by 8% instead of 4% increases the compound rate in future years,
No it doesn't. You return to whatever the price index (not the increase in the index) is next year.
How does that make sense, the welfare budget is £100bn, you're uprating by 4% so it increases to £104bn, next year you uprate by 5% so it becomes £109.2bn, alternatively you uprate by 8% this year so it increases to £108bn, next year you uprate by 5% as before so it becomes £113.4bn, using 8%, even as a one off, will have a huge lasting effect on the benefits bill.
It's not cost free and it's not a one off and you still have no way to pay for it other than begging the bond markets for money.
You don't uprate it by 5% next year. All you are doing is paying some of next year's increase early, so the uprate next year is less (in your example, you increase the total bill next year by £1.2bn).
Richard that's horrifically naive of you. Inflation at 5% in September "Nasty Tories uprate benefits by just 1% attacking the poorest".
All that happens is you create a new baseline at the higher rate, it's like tax, once they're introduced it's extremely difficult to get rid of them. That Osborne managed to get rid of the damaging 50% rate was a minor miracle, if only he'd also dumped the completely counter productive £100-125k tax free withdrawal band.
There's simply no way that the government could uprate benefits by just 1% with inflation at over 5%, even if there was a bringing forwards of the next rise. Honestly, I'm surprised you've fallen for Johnstone's idea, he's been an incredibly disappointing IFS head and he'd be the first person calling the following 1% rise unfair.
Richard is right on the detail.
Max is possibly right on the politics.
The problem is that benefits are uprated on out-of-date CPI stats, so when we get a massive surge in inflation the rates take 12 months to catch up.
2022-23 rates - based on the 12 months to September 2021 2023-24 rates - based on the 12 months to September 2022
I think the rates should use the most recent 12 months. Or perhaps be adjusted every 6 or 3 months. It's really unfair to ask claimants to wait for a whole year for their benefits to catch up with inflation.
It's a very unusual situation, with such a dramatic change in the inflation rate in just a few months.
Irrespective of the presentational point, the simple fact is that those dependant on benefits are going to have enormous problems paying for basic necessities. That should be addressed.
Yes.
The opposite factor as inflation goes the other way will not help when needed, and if inflation collapses PDQ (heard a credible commentator saying 9 months) then there could be a net compound fall of 2-3%.
I am also expecting a decline in inflation by Q1 or Q2, and posted that on here.
We need China to beat Covid and Russia/Ukraine to settle somehow.
Much of the inflation is a spike in pent up demand meeting atrophied supply chains.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
The debt servicing bill is very low relative to history, and the UK government did a great job in selling long dated bonds when interest rates were really low.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
(Open to correction if anyone has any startling recent or alternate data.)
The data is correct, but debt interest is a lagging statistic - and the related inputs such as inflation and interest rates, are rapidly rising. Next year’s debt interest is going to be horrific.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
Oh wait, it's the opposition's fault that the government instituted a policy that small children in Hartlepool many PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?
Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
I don't support them. I'm just pointing out that if they had tried any semblence of nuance they would have been howled down as not caring if people die.
And you know that's true, because that's exactly what happened for most of March 2020.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
(Open to correction if anyone has any startling recent or alternate data.)
And as mentioned to @rcs1000 very sensitive to inflation in itself, on account of its index-linked borrowing, and also the concomitant rate rises.
That depends what % of borrowing is index linked. Two reasons we were comparatively insulated from the impacts in 2010 and following was that most of our borrowing was a) our high percentage of fixed rate public debt and b) our longer term public debt compared to most other countries (10-15 years vs 5 years) so we did not have to go into the market to roll it over as soon.
So there was headroom to spread out public finance recovery.
The % of index-linked is higher now - not sure how much higher.
If there is an analysis that demonstrates this is a real problem in terms of borrowing costs going to an unacceptable level of GDP *now* I'd like to see it - rather than speculation on possibilities.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
Oh wait, it's the opposition's fault that the government instituted a policy that small children in Hartlepool many PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?
Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
I don't support them. I'm just pointing out that if they had tried any semblence of nuance they would have been howled down as not caring if people die.
And you know that's true, because that's exactly what happened for most of March 2020.
Yes I agree. There was definitely a period of "whatever it takes" and I think the country needed that. But at the same time, that was to get us through the pandemic. I think it would have been perfectly possible for them also to say that this was an exceptional event and they couldn't confirm or deny what effect the policy would have on the nations finances down the road (which of course was pretty obvious).
"Labour 'could struggle to make gains' at local elections despite Boris's Partygate woes as experts say Starmer faces tough task to beat 2018 performance
Keir Starmer is warned Labour will struggle to make gains at the local elections Most of the council seats being fought for next week were last contested in 2018 The results 4 years ago were a high water mark of Labour’s recent performance Election gurus suggest Sir Keir will do well to avoid an 'underwhelming' result"
At the very least though, Starmer will want Labour to take control of Barnet, Wandsworth, Bolton, Stockport, the Wirral, Burnley, Colchester, Crawley, Milton Keynes, Peterborough, Plymouth and West Lancashire and maybe Worthing and Swindon too if he is heading for No 10
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
If you are correct then Starmer's government will not last two years as I cannot see how it is not a minority one with SNP/Liberals providing some kind of confidence and supply. They will pull the plug quite soon I reckon if things are as bleak as you say on spending front.
I think Labour will win a working majority in 2024 (and my book is aligned to that view) and they'll inherit a crashing economy, high inflation and a very short window to present a credible spending plan to keep money markets on side. They will need to present an emergency budget which outlines £100bn-120bn in fiscal drag on the current budget, essentially holding spending at a 1-2% annual rise while taxes increase at 3-5% and attempt to sell that to the public as "increasing spending" as the Tories did in 2010.
The Labour line in this event will have to be - "Hard choices. No magic money tree. Clearing up the Tories' mess. Trouble with the Conservatives is they always end up running out of other people's money."
Except the Conservative manifesto in the election before austerity (2005) said Labour was "spending too much, wasting too much and taxing too much. Britain cannot continue indefinitely to spend more than she is earning without higher taxes or higher interest rates – either of which will harm our economic prospects. If we are to secure our future prosperity, government must once again start to live within its means", whereas the 2019 Labour equivalent called for eighty three billion pounds of new spending.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
I just don't see where you're getting the money from. At least in 2010 we had oodles of room for QE which the government used as a ladder out of the fiscal hole it dug for itself. We have little to no capacity for QE.
Additionally, talk of capital expenditure inevitably makes way for "our NHS". Anyone who thinks we could make current spending cuts to fund investment is kidding themselves.
The cost of servicing our debt is at a record low - debt servicing costs are like 1.5% -> there is loads more room to borrow, although we should obviously aim for projects that are actually a good idea. Not idiotic bridges across the north sea.
As for our NHS - we need a massive increase in capacity to deal with the backlog. That means investing in people definitely, but it also means investing in actually building (not pretending) newer and better facilities. NHS capital expenditure has really suffered over past years.
Moderately interesting development in Scotland. SNP have been pretty desperate to withhold their legal advice on IndyRef2. Looks like they will have to publish.
I should say the culture of secrecy at Holyrood is slowly becoming an issue, at least with the usually supine Scottish press.
"The Scottish Government will be forced to publish legal advice they received over a second independence referendum, after a 13-month battle.
A ruling by the Scottish Information Commissioner Daren Fitzhenry said the release of advice into the public domain would "significantly enhance public debate" on the issue.
Officials refused to publish documents through a Freedom of Information on indyref2 saying it would breach legal professional privilege."
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
I'm normally pretty bullish on the UK economy but the last few weeks have been a chastening experience, all of the warning signs are flashing and both Bailey and Rishi are sitting around twiddling their thumbs talking about £50 off an MOT.
I am amazed you are surprised. How could lockdown, furlough and almost endless money printing have resulted in anything else? The situation we have now is the inevitable outcome of these policies.
I'm not surprised, what disappoints me is that the government is currently asleep at the wheel talking about increasing spending from their already high levels. The conversation about bringing spending and the deficit under control hasn't even begun but it needed to at the end of last year. Forget more money for the NHS, forget more money for old people, forget more money for social care, we have to cut and cut fast.
This government gave billions to fraudsters. Billions. It it transpiring that they were wide effing open.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Of course they were - they were panicked into throwing money at people because of the clamour for lockdown. They took a decision that being wide open to fraudsters was a better option than having sob stories "I can't get any government support" all over the papers.
And Labour in government would have done the same thing.
At no point, at no point at all, did Sunak or Johnson or anybody else in government even try to make the point to the voters that these policies were not risk free or cost free.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
Oh, indeed. And why did they do that? Because the opposition and the media all supported the policy - so there was no space for nuance.
Oh wait, it's the opposition's fault that the government instituted a policy that small children in Hartlepool many PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?
Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
I don't support them. I'm just pointing out that if they had tried any semblence of nuance they would have been howled down as not caring if people die.
And you know that's true, because that's exactly what happened for most of March 2020.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
(Open to correction if anyone has any startling recent or alternate data.)
And as mentioned to @rcs1000 very sensitive to inflation in itself, on account of its index-linked borrowing, and also the concomitant rate rises.
That depends what % of borrowing is index linked. Two reasons we were comparatively insulated from the impacts in 2010 and following was that most of our borrowing was a) our high percentage of fixed rate public debt and b) our longer term public debt compared to most other countries (10-15 years vs 5 years) so we did not have to go into the market to roll it over as soon.
So there was headroom to spread out public finance recovery.
The % of index-linked is higher now - not sure how much higher.
If there is an analysis that demonstrates this is a real problem in terms of borrowing costs going to an unacceptable level of GDP *now* I'd like to see it - rather than speculation on possibilities.
Aha - see max supplied some numbers.
From your document:
"Relative to March 2021, interest costs have been revised up by £15.0 billion in 2021- 22, £15.5 billion in 2022-23 and an average of nearly £6 billion a year across the rest of the forecast. Again, this is predominantly due to higher than expected RPI inflation, with the increase in interest costs associated with index-linked gilts accounting for £13.8 billion and £10.3 billion of the increase in 2021-22 and 2022-23 respectively. Higher interest rates also increase debt interest spending across the forecast, while a higher path for Bank Rate reduces the impact of the APF in bringing down interest costs from 2022-23 onwards. "
That was an October 2021 document. Six months ago. Oh how the world has changed since then.
Anabobazina said: » show previous quotes "The idea that Raab, or indeed anyone, would deliberately watch pornography in the Commons chamber simply doesn't pass the sniff test. Why would anyone do that?
What might have happened is someone texted/WhatsApped something NSFW and they opened the message before realising what it was.
Why would anyone deliberately watch pornography on the job?"
SSI - Based on many documented cases, would appear it's because they are horny as horny-toads? AND think they can get away with it, because when they got caught was NOT the first time they'd done it, more like the umptenth.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
I just don't see where you're getting the money from. At least in 2010 we had oodles of room for QE which the government used as a ladder out of the fiscal hole it dug for itself. We have little to no capacity for QE.
Additionally, talk of capital expenditure inevitably makes way for "our NHS". Anyone who thinks we could make current spending cuts to fund investment is kidding themselves.
The cost of servicing our debt is at a record low - debt servicing costs are like 1.5% -> there is loads more room to borrow, although we should obviously aim for projects that are actually a good idea. Not idiotic bridges across the north sea.
As for our NHS - we need a massive increase in capacity to deal with the backlog. That means investing in people definitely, but it also means investing in actually building (not pretending) newer and better facilities. NHS capital expenditure has really suffered over past years.
In the coming financial year we're looking at debt servicing hit between 3.5% and 3.9% of GDP. This year it was already at just under 3%. Again, a third of our gilt stock is inflation linked to CPI. That gets eyewateringly expensive very quickly indeed.
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
(Open to correction if anyone has any startling recent or alternate data.)
And as mentioned to @rcs1000 very sensitive to inflation in itself, on account of its index-linked borrowing, and also the concomitant rate rises.
That depends what % of borrowing is index linked. Two reasons we were comparatively insulated from the impacts in 2010 and following was that most of our borrowing was a) our high percentage of fixed rate public debt and b) our longer term public debt compared to most other countries (10-15 years vs 5 years) so we did not have to go into the market to roll it over as soon.
So there was headroom to spread out public finance recovery.
The % of index-linked is higher now - not sure how much higher.
If there is an analysis that demonstrates this is a real problem in terms of borrowing costs going to an unacceptable level of GDP *now* I'd like to see it - rather than speculation on possibilities.
Aha - see max supplied some numbers.
From your document:
"Relative to March 2021, interest costs have been revised up by £15.0 billion in 2021- 22, £15.5 billion in 2022-23 and an average of nearly £6 billion a year across the rest of the forecast. Again, this is predominantly due to higher than expected RPI inflation, with the increase in interest costs associated with index-linked gilts accounting for £13.8 billion and £10.3 billion of the increase in 2021-22 and 2022-23 respectively. Higher interest rates also increase debt interest spending across the forecast, while a higher path for Bank Rate reduces the impact of the APF in bringing down interest costs from 2022-23 onwards. "
That was an October 2021 document. Six months ago. Oh how the world has changed since then.
Meanwhile 25% of our debt is index linked.
A third of the external debt, a quarter of the total iirc.
There is nothing wrong with the parliamentary conventions. We just need to get back to choosing Prime Ministers of integrity.
If parliamentary conventions don't prevent us from ending up with a PM who lacks integrity, they need to be updated
Calling someone a liar is very debased currency anyway. What's to stop everyone flinging the accusation about like a food fight? It's lazy and sloppy as an accusation. You can say that someone has made a false claim and present evidence that they did so knowingly.
Glenn Kessler, the lead fact checker for the Washington Post, almost always describes the errors he finds as "falsehoods", rather than "lies". (And grades them by the number of "Pinocchios" each deserves.)
I think that is -- usually -- the right thing to do, since we can not read each other's minds, and seldom have independent evidence of what others actually believe. Consider, for example, Marine Le Pen's efforts to moderate her party's stances on so many issues. Did she always believe what she says now? Did she change her mind? Is she pretending a moderation in order to win power? Some mixture? I don't have any way of telling how much she believes what she says, now. So for her, and most politicians in democracies, falsehoods is -- usually -- the better word than lies.
(There are exceptions of course, the obvious modern one being Trump, but most American politicians (and, so far as I can tell, most British politicians) are more likely to mislead their listeners, than outright lie to them.)
I think people get really silly about the 'impositions' of unparliamentary language, they lose all perspective and act like it is unpardonable, as if most debating chambers don't have rules on what can be said and how. Personally I think the benefits of at least trying to keep a lid on nothing but juvenille insults is worth it, especially as they can say whatever they like outside the chamber.
Also to add I don't believe some of those MPs at least who claim to be against the current rules really are against them, because they like the drama of being able to be shut down or kicked out for saying something unparliamentary, and posture about it.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong).
I often reflect on that, not just wrong but hilariously wrong as it turns out.
There is nothing wrong with the parliamentary conventions. We just need to get back to choosing Prime Ministers of integrity.
If parliamentary conventions don't prevent us from ending up with a PM who lacks integrity, they need to be updated
Calling someone a liar is very debased currency anyway. What's to stop everyone flinging the accusation about like a food fight? It's lazy and sloppy as an accusation. You can say that someone has made a false claim and present evidence that they did so knowingly.
More to the point no rules about parliamentary language - restrictive or free for all - prevent us ending up with a PM without integrity, since Boris didn't become PM because of what he and others can say in the Commons chamber. It's pretending to address the problem without actually doing so. RIchard is right there's nothign wrong with the conventions, it's the choices we (and MPs) make, and people lashing out.
On the public display of pornography: There was a sad case in Connecticut some years ago. A substitute teacher, wanting to send an email or two, turned on the classroom computer -- which began displaying a pornographic film. She was a French teacher by training, with no technical skills, and so it took her some time to get it turned off.
A headline hunting district attorney actually brought charges against her, though she was not convicted. (Most probably, the system had been compromised by teenage boys in the class. As far as I know that possibility was never investigated.)
(Incidentally, I would argue that almost all school districts in the US should contract for computer security, rather than try to do it themselves.)
On the public display of pornography: There was a sad case in Connecticut some years ago. A substitute teacher, wanting to send an email or two, turned on the classroom computer -- which began displaying a pornographic film. She was a French teacher by training, with no technical skills, and so it took her some time to get it turned off.
A headline hunting district attorney actually brought charges against her, though she was not convicted. (Most probably, the system had been compromised by teenage boys in the class. As far as I know that possibility was never investigated.)
(Incidentally, I would argue that almost all school districts in the US should contract for computer security, rather than try to do it themselves.)
Teenage boys, playing with a computer so the substitute teacher inadvertently ends up showing porn to the class?
Nah, can’t see that.
(A friend of mine does IT for a school. To say it’s a game of cat and mouse would be something of an understatement!)
On the public display of pornography: There was a sad case in Connecticut some years ago. A substitute teacher, wanting to send an email or two, turned on the classroom computer -- which began displaying a pornographic film. She was a French teacher by training, with no technical skills, and so it took her some time to get it turned off.
A headline hunting district attorney actually brought charges against her, though she was not convicted. (Most probably, the system had been compromised by teenage boys in the class. As far as I know that possibility was never investigated.)
(Incidentally, I would argue that almost all school districts in the US should contract for computer security, rather than try to do it themselves.)
Teenage boys, playing with a computer so the substitute teacher inadvertently ends up showing porn to the class?
Nah, can’t see that.
(A friend of mine does IT for a school. To say it’s a game of cat and mouse would be something of an understatement!)
"Robert'); DROP TABLE Students; --" has entered the chat
On the public display of pornography: There was a sad case in Connecticut some years ago. A substitute teacher, wanting to send an email or two, turned on the classroom computer -- which began displaying a pornographic film. She was a French teacher by training, with no technical skills, and so it took her some time to get it turned off.
A headline hunting district attorney actually brought charges against her, though she was not convicted. (Most probably, the system had been compromised by teenage boys in the class. As far as I know that possibility was never investigated.)
(Incidentally, I would argue that almost all school districts in the US should contract for computer security, rather than try to do it themselves.)
Teenage boys, playing with a computer so the substitute teacher inadvertently ends up showing porn to the class?
Nah, can’t see that.
(A friend of mine does IT for a school. To say it’s a game of cat and mouse would be something of an understatement!)
"Robert'); DROP TABLE Students; --" has entered the chat
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
My first instinct was (and still is) that this is Treasury bollocks to scare backbench MPs and excuse the current tax regime.
They were very worried. And not sure what would happen when the penny drops amongst the public at large.
This sounds like probable baloney.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
(Open to correction if anyone has any startling recent or alternate data.)
And as mentioned to @rcs1000 very sensitive to inflation in itself, on account of its index-linked borrowing, and also the concomitant rate rises.
That depends what % of borrowing is index linked. Two reasons we were comparatively insulated from the impacts in 2010 and following was that most of our borrowing was a) our high percentage of fixed rate public debt and b) our longer term public debt compared to most other countries (10-15 years vs 5 years) so we did not have to go into the market to roll it over as soon.
So there was headroom to spread out public finance recovery.
The % of index-linked is higher now - not sure how much higher.
If there is an analysis that demonstrates this is a real problem in terms of borrowing costs going to an unacceptable level of GDP *now* I'd like to see it - rather than speculation on possibilities.
Aha - see max supplied some numbers.
From your document:
"Relative to March 2021, interest costs have been revised up by £15.0 billion in 2021- 22, £15.5 billion in 2022-23 and an average of nearly £6 billion a year across the rest of the forecast. Again, this is predominantly due to higher than expected RPI inflation, with the increase in interest costs associated with index-linked gilts accounting for £13.8 billion and £10.3 billion of the increase in 2021-22 and 2022-23 respectively. Higher interest rates also increase debt interest spending across the forecast, while a higher path for Bank Rate reduces the impact of the APF in bringing down interest costs from 2022-23 onwards. "
That was an October 2021 document. Six months ago. Oh how the world has changed since then.
Meanwhile 25% of our debt is index linked.
Without undermining the seriousness of balancing the budget (which I do believe in) index linked isn't really that major of an issue.
Sure a quarter to a third may be index linked, but if the country is growing in real terms then that should really be read as two thirds to three quarters is not index linked.
Debt to GDP is the relevant figure, and debt servicing to GDP. Inflation may cost cash, but if the GDP is growing then that should relatively cancel each other out.
A few decades of inflation is probably what we need now to deflate away the debts we have borrowed. That is basically what succeeded from 45 to 74 approximately.
DJ Tim Westwood steps down from his show until further notice
Why has this broken now. There have been rumours about Westwood for YEARS.
Strange to think that his father was a Bishop.
He’s no longer working for the BBC now, that’s why it has just come out.
BBC DJs, like MPs, are assumed to be honourable people.
I don't disagree with you that the BBC has a dreadful record on dealing with the behaviour of the "talent". But that doesn't really answer the question of why it came out now, as Westwood didn't just leave the Beeb recently - he's not been there for the best part of 10 years.
Good question. It was actually a joint BBC News / Guardian investigation that brought this story up in the last couple of days.
I remember in 2008/9 Mervyn King was quoted as saying that the next government who wins would have to impose such huge and eyewatering cuts to spending that they'd be out of power for a generation (which happily turned out to be wrong). I think it what applies to the next government coming in. Weak governor, inflation running wild, sterling tanking, deficit at 6.5% of GDP, economy stalling, COVID rally running out of steam, growth engine suffocated with a huge tax burden and borrowing power quickly running out.
I wouldn't be shocked if we get a few ratings downgrades in the next year or two, our gilt prices already trade below our current average rating.
You think Team Starmer will impose huge cuts.....brave prediction.
I don't think he'll have a choice. There will be market enforced discipline, bond buyers will go on strike and suddenly yields will rise to over 5% on medium dated debt and over 4% on shorter term paper. The state simply can't afford to rollover it's existing debt stock at those rates as well as take on £100bn in new borrowing per year. He's simply got no choice, neither will the Tories. Dave and George presented a credible plan to bring the deficit under control, had reasonable headwinds and won the trust of the markets to enforce discipline on spending so the money kept flowing.
It's been a while since people brought up the bond market vigilantes... makes me nostalgic for 2010 or so...
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
I just don't see where you're getting the money from. At least in 2010 we had oodles of room for QE which the government used as a ladder out of the fiscal hole it dug for itself. We have little to no capacity for QE.
Additionally, talk of capital expenditure inevitably makes way for "our NHS". Anyone who thinks we could make current spending cuts to fund investment is kidding themselves.
The cost of servicing our debt is at a record low - debt servicing costs are like 1.5% -> there is loads more room to borrow, although we should obviously aim for projects that are actually a good idea. Not idiotic bridges across the north sea.
As for our NHS - we need a massive increase in capacity to deal with the backlog. That means investing in people definitely, but it also means investing in actually building (not pretending) newer and better facilities. NHS capital expenditure has really suffered over past years.
In the coming financial year we're looking at debt servicing hit between 3.5% and 3.9% of GDP. This year it was already at just under 3%. Again, a third of our gilt stock is inflation linked to CPI. That gets eyewateringly expensive very quickly indeed.
Agreed, it would. However 2 questions:
1 - How quickly does that come back down when inflation is back at 3-4%, as forecast for 2023?
2 - Is that before or after the counterbalance from assets in the Asset Purchasing Facility, ie assets now owned by the Govt in exchange for Quantitative Easing?
Comments
Geidt has concluded his investigation into Rishi Sunak’s interests, confirming he’s found no wrong-doing:
“Considering the Card against the specific responsibilities of the Chancellor’s ministerial offices subsequent to his first role, I do not consider that its possession would constitute an inherent conflict of interest…. I advise that the requirements of the Ministerial Code have been adhered to by the Chancellor, and that he has been assiduous in meeting his obligations and in engaging with this investigation.”
The only levers the Chancellor has left, are raising taxes and cutting spending.
The problem is severe, and is to some extent only masked by the Eurozone having even bigger problems of their own.
They have no business running the country's finances, and they have no business asking people for taxes. No business at all.
Wwwwhhhhhhoooooooppppeeeeeeeeeee!
And Labour in government would have done the same thing.
I wonder whether the May elections might show voters have no confidence not just in the government, but in those who would replace them.
And the Germans would be well advised to hang tough. It would be far from costless for the Russians to have to shut down gas production, and could damage their reservoirs.
Rather, the burden of taxation needs to shift from producers to rentiers (like me); ie from income to wealth.
In turn, the focus of government spend needs to be balanced towards capital investment. That alone will feel like austerity given that the money must be found from social spending.
We also need immigration - more of it - to relieve demographic challenge, but it must be twinned with profound changes to the planning and housebulding regime.
They allowed lockdown to be classed as 'safe' when it is being shown to simply be a policy with different risks.
The argument was the same in the New Statesman piece, it’s an election in Labour areas and they got the vote out last time so there’s little much further for Labour to go. Borne out by the fact despite big lead in London how much further it can swing since last time is minuscule.
Poppycock. I’m not buying it. If Labour can’t give the Tories a damn good thrashing next week in this climate with this political narrative then it exposes how uninspiring Starmer’s New Labour actually is.
For sure Libdems and greens will have fun at Tory expense next week, if Labour can’t go a long way forward against Tories in direct seat and council swaps, in fact go backward against the greens, then it is without any doubt a bad night for Starmer’s Labour.
I’m assuming that’s the working title of the next Labour manifesto?
Irrespective of the presentational point, the simple fact is that those dependant on benefits are going to have enormous problems paying for basic necessities. That should be addressed.
https://vf.politicalbetting.com/discussion/comment/3896030#Comment_3896030
"Spoke to someone v close to govt last week and they were super worried about govt finances. Forget about lower spending they were seeing a likelihood of cuts. The debt servicing bill is eye watering and unsustainable. That puts the Cons in a difficult place in the run up to any election."
small children in Hartlepoolmany PB-ers (where O where is @contrarian now) knew would come with a reckoning? And the media?Jeez I get that you like the current government but that isn't even on a the big boys made me do it level; it's saying the small boys made me do it. That is the government you support?
His story of collapsing onto the luggage carousel for a bit of shut-eye was 💯
I don't think it's particularly controversial to suggest that our risk premium to our credit rating could result in a bond strike if the government hasn't got a credible plan to bring spending under control.
Personally I think this is wrong, we need a sustained period of higher than normal capital expenditure (to make up for what we lost under austerity), hopefully well-targeted at getting the country more productive.
So big govt investment in transport, science, clean energy, infrastructure, houses and take on the NIMBYs. Financed by borrowing as necessary.
I would argue to fund via 2/3 reallocation of current spend, 1/3 extra borrowing. Something like that.
Esp. including any modern cases?
Additionally, talk of capital expenditure inevitably makes way for "our NHS". Anyone who thinks we could make current spending cuts to fund investment is kidding themselves.
https://foreignpolicy.com/2022/04/25/inflation-japan-deflation-economy/
The only politician pushing that is Richard Tice.
The traditional point of concern is when Govt Debt Interest is getting towards 4% of GDP.
As far as I can see, we are under 2%.
https://obr.uk//docs/dlm_uploads/CCS1021486854-001_OBR-EFO-October-2021_CS_Web-Accessible_v2.pdf
(Open to correction if anyone has any startling recent or alternate data.)
Did NOT end well for him IIRC.
The UK? Not so much. The market might test the UK's resolve there.
The issue is te £120bn of new debt that we need to raise over the coming year and the £150bn or so that needs to be rolled over, all without the BoE buying up any new debt (and there's been talk of the QE stock being reduced and the £800bn of gilts not being renewed as it comes to term). In the coming financial year we will need to raise something like 15% of the current outstanding stock of debt and that's with favourable long dated gilts as you say.
That is a mammoth task and maybe you're right that the governor will cave and restart QE but it's a big gamble.
The opposite factor as inflation goes the other way will not help when needed, and if inflation collapses PDQ (heard a credible commentator saying 9 months) then there could be a net compound fall of 2-3%.
Similar thing going on with BJ's defence spending boost.
We need China to beat Covid and Russia/Ukraine to settle somehow.
Much of the inflation is a spike in pent up demand meeting atrophied supply chains.
Was the son of a preacher man...
And you know that's true, because that's exactly what happened for most of March 2020.
She changed her mind after Dusty’s immortal rendition.
So there was headroom to spread out public finance recovery.
The % of index-linked is higher now - not sure how much higher.
If there is an analysis that demonstrates this is a real problem in terms of borrowing costs going to an unacceptable level of GDP *now* I'd like to see it - rather than speculation on possibilities.
Aha - see max supplied some numbers.
As for our NHS - we need a massive increase in capacity to deal with the backlog. That means investing in people definitely, but it also means investing in actually building (not pretending) newer and better facilities. NHS capital expenditure has really suffered over past years.
https://neweconomics.org/2021/11/public-debt-and-debt-servicing-costs-the-nightmare-that-never-was
I should say the culture of secrecy at Holyrood is slowly becoming an issue, at least with the usually supine Scottish press.
https://www.dailyrecord.co.uk/news/politics/snp-government-ordered-publish-legal-26808107
"The Scottish Government will be forced to publish legal advice they received over a second independence referendum, after a 13-month battle.
A ruling by the Scottish Information Commissioner Daren Fitzhenry said the release of advice into the public domain would "significantly enhance public debate" on the issue.
Officials refused to publish documents through a Freedom of Information on indyref2 saying it would breach legal professional privilege."
Post mass vaccines? not so much.
"Relative to March 2021, interest costs have been revised up by £15.0 billion in 2021- 22, £15.5 billion in 2022-23 and an average of nearly £6 billion a year across the rest of the forecast. Again, this is predominantly due to higher than expected RPI inflation, with the increase in interest costs associated with index-linked gilts accounting for £13.8 billion and £10.3 billion of the increase in 2021-22 and 2022-23 respectively. Higher interest rates also increase debt interest spending across the forecast, while a higher path for Bank Rate reduces the impact of the APF in bringing down interest costs from 2022-23 onwards. "
That was an October 2021 document. Six months ago. Oh how the world has changed since then.
Meanwhile 25% of our debt is index linked.
https://www.ndtv.com/offbeat/us-college-offers-course-where-students-will-watch-porn-films-together-2924826
I think that is -- usually -- the right thing to do, since we can not read each other's minds, and seldom have independent evidence of what others actually believe. Consider, for example, Marine Le Pen's efforts to moderate her party's stances on so many issues. Did she always believe what she says now? Did she change her mind? Is she pretending a moderation in order to win power? Some mixture? I don't have any way of telling how much she believes what she says, now. So for her, and most politicians in democracies, falsehoods is -- usually -- the better word than lies.
(There are exceptions of course, the obvious modern one being Trump, but most American politicians (and, so far as I can tell, most British politicians) are more likely to mislead their listeners, than outright lie to them.)
A headline hunting district attorney actually brought charges against her, though she was not convicted. (Most probably, the system had been compromised by teenage boys in the class. As far as I know that possibility was never investigated.)
(Incidentally, I would argue that almost all school districts in the US should contract for computer security, rather than try to do it themselves.)
Nah, can’t see that.
(A friend of mine does IT for a school. To say it’s a game of cat and mouse would be something of an understatement!)
Sure a quarter to a third may be index linked, but if the country is growing in real terms then that should really be read as two thirds to three quarters is not index linked.
Debt to GDP is the relevant figure, and debt servicing to GDP. Inflation may cost cash, but if the GDP is growing then that should relatively cancel each other out.
A few decades of inflation is probably what we need now to deflate away the debts we have borrowed. That is basically what succeeded from 45 to 74 approximately.
1 - How quickly does that come back down when inflation is back at 3-4%, as forecast for 2023?
2 - Is that before or after the counterbalance from assets in the Asset Purchasing Facility, ie assets now owned by the Govt in exchange for Quantitative Easing?