Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs abd extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
How many people actually have variable rate mortgages? I was under the impression it was less than 2 million in the U.K. Its why interest rates are such a poor tool. If you rate is fixed, it has no effect until you need to re-fix.
26% of UK mortgages are variable rate. Of course, mortgages fixed for a year or two only defer problems a short while. Anyone who wants a new mortgage has a problem.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yes. If interest rates balloon to 7% I'll be paying an extra £2,000 pcm on my mortgage by the end of next year. I might just be able to stay in my house because i have a good income but I'd have to junk everything else.
Others will not. Theg might be forced to vote Labour out of desperation for financial control.
Tories risk being out of power for 20 years with this madness.
I was thinking about that, and 20 years felt about right to me. Blair and Brown were in power for 13 after the landslide of 1997, but this shower makes the Major government look positively stellar.
That Major administration did some bad things and had some appalling sneering degenerates as ministers - Peter Lilley and his list as a prime example.
But you look at their economic policies and they were sound. They flushed through the Lawson recession and had the country on a positive track. Whereas today the entire cabinet is made up of sneering Lilley's and they have just said "fuck you" to every tax payer who doesn't fancy another yacht.
Surely it can't end well. Because whatever the Wail and Express want to spin, lived reality for voters is clear and unavoidable and damning.
I've posted before that this party no longer give a rat fuck about anyone other than themselves. So yesterday was hardly a surprise. It's just that after the boosterism of Boris which pretended they still cared, Mistress Truss has no care for such weakness.
It's more bonkers than that. A backbench MP is on 84k. The PM is paid about 160k. Yes, MPs have other sources of income, but quite a few won't be in the winners' enclosure themselves. That's how narrowly-drawn this budget is.
Maybe the way to understand this government is as victims of cultish indoctrination.
As for the comparison with Major, by 1997 he was seen as a victim of events beyond his control. Not a good look for a PM, sure. But he left the country solvent (albeit shabby) which was good.
Unless the current gamble works (and what odds would people give on that?), the UK is about to crash into an iceberg, and Truss and KK will have steered it that way.
The Chris Mason <> Kwarteng interview yesterday was instructive. CofE refusing to accept that we're in a recession despite clear and unambiguous data proving that to be the case.
So, they crash us into an iceberg. Refuse to accept that we crashed. Start carping that the people saying "oh fuck we're sinking" are Putin apologists. Then start sneering that the people drowning due to lack of lifeboats should have got a better job to insulate themselves from Iceberg incidents should they occur. Which they definitely haven't.
I will repeatedly return to this word "sneering". It isn't a good look in politics whichever party ends up doing it. The current government seemingly have no clue just how awful their team look when they interact with anyone. And their effete moron cheerleaders in the right wing media - and lets include the GBeebies idiots here as well - do not help.
Are we in a recession? I recall the infamous triple dip that wasn’t - full data revised economic performance upwards. We also have full employment. You want a job, you can get one. There are huge problems ahead for sure, but this is certainly not a normal recession, if we are actually in one.
I dont think technical achievement of recession matters.
I recall the one that wasnt after later revisions and ultimately i dont think people felt as if there was one even if the stats people said there was.
Likewise, if we technically avoid one it doesn't matter because large numbers feel like we're in the shit. Ive never seen so many people worried about basic spending and the need to adjust to prepare for coming economic pain.
Lots of people are worried, some with good reason too.
I will say, and probably be mocked for this, that for many it’s the prevailing media crisis reporting that is the main issue. For the most in need of help the energy cap is going to make it really hard. For the rest it will be annoying, but not terminal.
As with all budgets, mini or otherwise, there are two aspects: the economic and the political. The economic rationale for this package is questionable at best. The problems of the UK economy are structural. Productivity and investment are weak, infrastructure is under-invested and decaying. Small businesses are going to the wall and despite entrepreneurship being relatively strong in Britain, self-employment is increasingly unattractive. Red tape since Brexit has led to a significant fall in exports and the damage has been disproportionately on small businesses. Literally none of these problems are being addressed by this package. Even if the package were to stimulate some kind of short term consumption-led growth boom, this is unlikely to be sustainable, not least because what is being added on the fiscal side will be need to be offset, to a great degree, by the need for higher rates. Owing to the structural weaknesses of the economy, the depreciation of Sterling will not so much stimulate exports as import inflation. The Bank of England therefore will need to set rates increasingly high, and the sugar rush of this nominal fiscal stimulus will rapidly diminish. The fall in Cable yesterday was a sharp warning that an old fashioned Sterling crisis could be just around the corner.
Politically the package is more or less a disaster. "Reverse Robin Hood" is a charge that will stick and it is a very bad look from an Old Etonian chancellor. The shameless Mail and Express can witter all they like, but "massive tax cuts for the rich" is charge that cuts through, because its true. After nearly a decade of Tory sturm and drang, the voters are getting tired. Even a "coalition of chaos" looks good compared to this Conservative chaos. Tories may deride SKS as a dull figure, but such dullness is increasingly reassuring compared to the reckless and incompetent policies outlined yesterday. Over the course of the next six months, I predict, the voters will make up their minds that change is needed and the Conservatives must go. The glum faces on the government benches yesterday shows that the Tories fear this and also know that the chances of this actually working are not good. Meanwhile, the risks being taken with the economy could torpedo their party for a generation.
Incidentally I think these front pages show what is wrong with the media in the UK. The hand wringing from the left wing titles is fairly wimpish, but the bullish messages from the right wing press are just garbage. There is not even a pretense any more: it is open propaganda. How little self-respect the journalists and especially readers of these comics must now have to think such vacuous drivel has any kind of intellectual or moral strength.
Well said. The evolution of the Mail into a propaganda sheet promoting a section of the Tory elite does feel new. It used to have a bias, but what it goes further today. Its campaign against Penny Mourdaunt was eye opening.
Not sure what anyone can do about it, but the journalist/press officers must be conflicted.
It's more simple than that: the Mail is read by the retired and they are very excited at the prospect of earning interest on their savings.
Shame that inflation will still erode their real value.
If you're a Tory MP, you'll learn more about how to defend the govt’s position by reading @julianHjessop's Twitter feed, than you ever will from whips "lines to take". Measured, nuanced, open to criticism, but always clear. You may not agree with it, but you can engage with it. https://twitter.com/julianHjessop/status/1573560779227500546
You likely lose the Party whip if you don't vote for a Budget.
But hey, this isn't Budget. If Rishi's supporters sit on their hands, then maybe.
Even if it passes now, expect a Brady in-tray load of "we told you so...." if in the New Year it has not delivered.
Very interesting point. This is NOT a budget. Its a "special fiscal operation". So unless Trusster makes this a confidence motion, they can abstain or vote against measures. Or will they even have the chance to do so? Hoyle mentioned something about papers related to emergency budget measures at the start of the statement. Parliament is now suspended again. When they get back, won't this all have come into effect already?
The OBR have savaged this and been blocked from publishing. The Treasury Select Committee is horrified but can't act as suspended. The Commons itself had 2 hours yesterday and thats it. There's barely a thin coating of democracy left, especially with an economic programme this crazy and this disconnected from what the government was elected to do.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs abd extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
How many people actually have variable rate mortgages? I was under the impression it was less than 2 million in the U.K. Its why interest rates are such a poor tool. If you rate is fixed, it has no effect until you need to re-fix.
Something like 20% of mortgages are renewed every year, people who have fixed at 2% will now be looking at 6-7% before the end of the year is out. I'm extremely lucky that I've got a 10y fix at 2.7% which goes until 2031. Not many people will have that luxury. For some their monthly repayment will double leaving them thousands of pounds per year worse off.
We are in the last stages of a 10 year fix at just north of 3%. We are building an extension but could also see the interest rate rises coming a mile off (thanks pb).
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yup.
Remember that a load of tax rises were pre-announced and most are still in the pipeline.
In particular, the freezing of tax thresholds has turned into a huge stealth tax that hits average voters a lot, far more than initially planned.
Selling tax cuts when most voters can see their taxes going up might prove tricky.
What did he do to welfare payments for media to call it a squeeze on them, it seems to have been lost in the noise.
What did he do to VAT? I was waiting to buy a 4K TV, will it be cheaper now?
If you don't mind waiting for a few weeks, a branch of JohnPye Auctions near you will be getting in a boatload of bankrupt stock tellies. They'll go for a fraction of the retail price. And if you can hang on until the new year there will be so many they will be more or less giving them away.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
Not really. The stoking of inflation will increase the numbers paying tax through fiscal drag as thresholds remain frozen. This is the basis of the IFS analysis. This assumes that people do get payrises near inflation of course.
The tax changes alone will leave most people worse off by the end of the parliament. Higher interest and inflation is on top of that.
To have a tax cutting budget that actually puts up the tax rate for most workers is quite demented.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Presumably it's a confidence vote, even though "it's not a budget"...
Is the Fixed Term Parliament Act still in force?
No.
I must have missed its repeal. Ah well, probably for the best. The rest of my post can be safely ignored, while I go and read about how confidence votes work now.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
Not really. The stoking of inflation will increase the numbers paying tax through fiscal drag as thresholds remain frozen. This is the basis of the IFS analysis. This assumes that people do get payrises near inflation of course.
The tax changes alone will leave most people worse off by the end of the parliament. Higher interest and inflation is on top of that.
To have a tax cutting budget that actually puts up the tax rate for most workers is quite demented.
You've got to admit, it's quite impressive to cut taxes and still charge almost everyone more in tax. That's a Bergholt Stuttley Johnson level of ineptitude.
As with all budgets, mini or otherwise, there are two aspects: the economic and the political. The economic rationale for this package is questionable at best. The problems of the UK economy are structural. Productivity and investment are weak, infrastructure is under-invested and decaying. Small businesses are going to the wall and despite entrepreneurship being relatively strong in Britain, self-employment is increasingly unattractive. Red tape since Brexit has led to a significant fall in exports and the damage has been disproportionately on small businesses. Literally none of these problems are being addressed by this package. Even if the package were to stimulate some kind of short term consumption-led growth boom, this is unlikely to be sustainable, not least because what is being added on the fiscal side will be need to be offset, to a great degree, by the need for higher rates. Owing to the structural weaknesses of the economy, the depreciation of Sterling will not so much stimulate exports as import inflation. The Bank of England therefore will need to set rates increasingly high, and the sugar rush of this nominal fiscal stimulus will rapidly diminish. The fall in Cable yesterday was a sharp warning that an old fashioned Sterling crisis could be just around the corner.
Politically the package is more or less a disaster. "Reverse Robin Hood" is a charge that will stick and it is a very bad look from an Old Etonian chancellor. The shameless Mail and Express can witter all they like, but "massive tax cuts for the rich" is charge that cuts through, because its true. After nearly a decade of Tory sturm and drang, the voters are getting tired. Even a "coalition of chaos" looks good compared to this Conservative chaos. Tories may deride SKS as a dull figure, but such dullness is increasingly reassuring compared to the reckless and incompetent policies outlined yesterday. Over the course of the next six months, I predict, the voters will make up their minds that change is needed and the Conservatives must go. The glum faces on the government benches yesterday shows that the Tories fear this and also know that the chances of this actually working are not good. Meanwhile, the risks being taken with the economy could torpedo their party for a generation.
Incidentally I think these front pages show what is wrong with the media in the UK. The hand wringing from the left wing titles is fairly wimpish, but the bullish messages from the right wing press are just garbage. There is not even a pretense any more: it is open propaganda. How little self-respect the journalists and especially readers of these comics must now have to think such vacuous drivel has any kind of intellectual or moral strength.
Well said. The evolution of the Mail into a propaganda sheet promoting a section of the Tory elite does feel new. It used to have a bias, but what it goes further today. Its campaign against Penny Mourdaunt was eye opening.
Not sure what anyone can do about it, but the journalist/press officers must be conflicted.
It's more simple than that: the Mail is read by the retired and they are very excited at the prospect of earning interest on their savings.
And house price inflation. Hence the cut in stamp duty.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yup.
Remember that a load of tax rises were pre-announced and most are still in the pipeline.
In particular, the freezing of tax thresholds has turned into a huge stealth tax that hits average voters a lot, far more than initially planned.
Selling tax cuts when most voters can see their taxes going up might prove tricky.
What did he do to welfare payments for media to call it a squeeze on them, it seems to have been lost in the noise.
What did he do to VAT? I was waiting to buy a 4K TV, will it be cheaper now?
If you don't mind waiting for a few weeks, a branch of JohnPye Auctions near you will be getting in a boatload of bankrupt stock tellies. They'll go for a fraction of the retail price. And if you can hang on until the new year there will be so many they will be more or less giving them away.
Thank you.
What’s the point though of a tax cutting budget to stop a recession, if my high street shop for tec is no cheaper 🤷♀️
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
Not 100% accurate.
Come April the same choice for most people will be to take a contract rather than a permanent job and pay themselves using a limited company.
For people doing that earn £50,000 it would reduce NI costs to zero and after tax give you a take home pay of £40,080 after all tax was deducted.
An interesting point. I have been working with the same group of Romanian companies for 2 years, developing and trying to implement UK business plans for their expansion. After a couple of false starts (driven by changes at their end, not mine!) we are finally about to get on with it with scale in the UK.
Previously I had been clear that once we start trading properly and hiring people, my contractor status would become untenable and I would need to be employed by the new UK business to run it. Is that still true?
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
Not 100% accurate.
Come April the same choice for most people will be to take a contract rather than a permanent job and pay themselves using a limited company.
For people doing that earn £50,000 it would reduce NI costs to zero and after tax give you a take home pay of £40,080 after all tax was deducted.
An interesting point. I have been working with the same group of Romanian companies for 2 years, developing and trying to implement UK business plans for their expansion. After a couple of false starts (driven by changes at their end, not mine!) we are finally about to get on with it with scale in the UK.
Previously I had been clear that once we start trading properly and hiring people, my contractor status would become untenable and I would need to be employed by the new UK business to run it. Is that still true?
Yes if you're following the letter of the law properly still I believe.
That's odd. Petrol at my local Tesco's was 186p in the summer. Now it is 162p. What are they moaning about?
That petrol was bought byTescos already. When they buy more, the exchange rate will increase the price. Mind you, oil keeps dropping so that might masks the rise.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yes, the fall in sterling will cause commodity price inflation and we import oil, energy, food and raw commodities.
The weakness of sterling won't necessarily help exporters who are already struggling with surging prices. If the UK was self sufficient in energy production then it would be of great help, but we aren't so all it means is prices rising by 3-4% in the next few weeks unless the BoE puts up rates by at least 1% on Monday and then another 1% at the next regular meeting in November.
This is quite possibly the worst fiscal event/budget I've witnessed from any Chancellor. We've splurged £45bn in tax cuts and it will result in 90% of working people being and feeling poorer by the end of October. Mental.
You'd know better than me, but would an emergency rate increase from the BoE really help? I'd worry that it would, understandably, look like panic, and that would further damage confidence in the UK economy.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
Not 100% accurate.
Come April the same choice for most people will be to take a contract rather than a permanent job and pay themselves using a limited company.
For people doing that earn £50,000 it would reduce NI costs to zero and after tax give you a take home pay of £40,080 after all tax was deducted.
An interesting point. I have been working with the same group of Romanian companies for 2 years, developing and trying to implement UK business plans for their expansion. After a couple of false starts (driven by changes at their end, not mine!) we are finally about to get on with it with scale in the UK.
Previously I had been clear that once we start trading properly and hiring people, my contractor status would become untenable and I would need to be employed by the new UK business to run it. Is that still true?
Let me post a flow diagram I did for LinkedIn yesterday. the response so far has been cynical it accurate and that includes people who I know work in Longbenton
Although you will have a slight different issue as an office holder but even then I suspect you could separate things out.
In many ways the biggest changes yesterday were completely hidden - there is this one on tax and a different one of Thursday where all EU based employment law was quietly dropped from January 1st 2024 unless explicitly relegislated.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
We have to as the very direct question - was the purpose of the tax cuts actually to drive growth? Two extremes possible with shades of grey in-between: 1. Truss and Kwarteng absolutely convinced that trickle down works and huge tax cuts at the top will increase tax revenues and growth 2. T & K know this will do nothing of the sort, but they get to hand a vast bung to their patrons whilst wrecking the economy to set up Labour for pain when they take over
The Johnson government was openly corrupt with handing large sums to its friends and patrons, but this is on a completely different scale. That corruption was in the shadows, this is in the open. Do they no longer care that it looks this bad? Make hay whilst the sun shines, we're out at the next election anyway, so what the hell.
The morning after the day before and no matter your views of yesterday's budget statement, it cannot be denied it was dramatic and has changed the political debate all the way to GE 2024 which I would expect will be in October 24
I do support low taxes and a small state but this is a big gamble and very much contrary to where public opinion is, so you can say it was either brave or foolish
I notice opponents complain about the mail, express and other conservative supporting papers endorsing Kwarteng's budget but it is rather as pointless as it would be to expect the Guardian to acclaim the budget
It is noticeable that business groups from the CBI to the federation of small businesses have welcomed the measures and at least Truss and Kwarteng have buried Johnson's absurd f_ _ _ business attitude
Certainly it has given Labour an open goal and I do not expect much of a poll boost for Truss, but then I have been consistent on this maintaining that next Spring post the new tax year and maybe the coronation that polls will become important and provide a better prediction for 2024
As with all budgets, mini or otherwise, there are two aspects: the economic and the political. The economic rationale for this package is questionable at best. The problems of the UK economy are structural. Productivity and investment are weak, infrastructure is under-invested and decaying. Small businesses are going to the wall and despite entrepreneurship being relatively strong in Britain, self-employment is increasingly unattractive. Red tape since Brexit has led to a significant fall in exports and the damage has been disproportionately on small businesses. Literally none of these problems are being addressed by this package. Even if the package were to stimulate some kind of short term consumption-led growth boom, this is unlikely to be sustainable, not least because what is being added on the fiscal side will be need to be offset, to a great degree, by the need for higher rates. Owing to the structural weaknesses of the economy, the depreciation of Sterling will not so much stimulate exports as import inflation. The Bank of England therefore will need to set rates increasingly high, and the sugar rush of this nominal fiscal stimulus will rapidly diminish. The fall in Cable yesterday was a sharp warning that an old fashioned Sterling crisis could be just around the corner.
Politically the package is more or less a disaster. "Reverse Robin Hood" is a charge that will stick and it is a very bad look from an Old Etonian chancellor. The shameless Mail and Express can witter all they like, but "massive tax cuts for the rich" is charge that cuts through, because its true. After nearly a decade of Tory sturm and drang, the voters are getting tired. Even a "coalition of chaos" looks good compared to this Conservative chaos. Tories may deride SKS as a dull figure, but such dullness is increasingly reassuring compared to the reckless and incompetent policies outlined yesterday. Over the course of the next six months, I predict, the voters will make up their minds that change is needed and the Conservatives must go. The glum faces on the government benches yesterday shows that the Tories fear this and also know that the chances of this actually working are not good. Meanwhile, the risks being taken with the economy could torpedo their party for a generation.
Incidentally I think these front pages show what is wrong with the media in the UK. The hand wringing from the left wing titles is fairly wimpish, but the bullish messages from the right wing press are just garbage. There is not even a pretense any more: it is open propaganda. How little self-respect the journalists and especially readers of these comics must now have to think such vacuous drivel has any kind of intellectual or moral strength.
Well said. The evolution of the Mail into a propaganda sheet promoting a section of the Tory elite does feel new. It used to have a bias, but what it goes further today. Its campaign against Penny Mourdaunt was eye opening.
Not sure what anyone can do about it, but the journalist/press officers must be conflicted.
It's more simple than that: the Mail is read by the retired and they are very excited at the prospect of earning interest on their savings.
Real Interest rates will still be negative at 7%.
Those forecasts of 18% and 22% inflation by next year are not looking so crazy now.
That's too sophisticated a concept for them to get their heads around.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
Not 100% accurate.
Come April the same choice for most people will be to take a contract rather than a permanent job and pay themselves using a limited company.
For people doing that earn £50,000 it would reduce NI costs to zero and after tax give you a take home pay of £40,080 after all tax was deducted.
An interesting point. I have been working with the same group of Romanian companies for 2 years, developing and trying to implement UK business plans for their expansion. After a couple of false starts (driven by changes at their end, not mine!) we are finally about to get on with it with scale in the UK.
Previously I had been clear that once we start trading properly and hiring people, my contractor status would become untenable and I would need to be employed by the new UK business to run it. Is that still true?
Yes if you're following the letter of the law properly still I believe.
I am! And frankly I want the job title and the status that goes with the job.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs abd extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
How many people actually have variable rate mortgages? I was under the impression it was less than 2 million in the U.K. Its why interest rates are such a poor tool. If you rate is fixed, it has no effect until you need to re-fix.
Something like 20% of mortgages are renewed every year, people who have fixed at 2% will now be looking at 6-7% before the end of the year is out. I'm extremely lucky that I've got a 10y fix at 2.7% which goes until 2031. Not many people will have that luxury. For some their monthly repayment will double leaving them thousands of pounds per year worse off.
My renewal is up in December next year. Nobody that experiences that will vote Tory.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
We have to as the very direct question - was the purpose of the tax cuts actually to drive growth? Two extremes possible with shades of grey in-between: 1. Truss and Kwarteng absolutely convinced that trickle down works and huge tax cuts at the top will increase tax revenues and growth 2. T & K know this will do nothing of the sort, but they get to hand a vast bung to their patrons whilst wrecking the economy to set up Labour for pain when they take over
The Johnson government was openly corrupt with handing large sums to its friends and patrons, but this is on a completely different scale. That corruption was in the shadows, this is in the open. Do they no longer care that it looks this bad? Make hay whilst the sun shines, we're out at the next election anyway, so what the hell.
I think it is both but mostly 2. They have a thin shred of hope that 1 happens, because they are so ideological. But they know that 2 is the more likely outcome. 1972 is an encouraging precedent for them though - they handed Labour a mess in 1974 that couldn't get fixed, then Thatcher got in 5 years later and they were in power for almost two decades.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yup.
Remember that a load of tax rises were pre-announced and most are still in the pipeline.
In particular, the freezing of tax thresholds has turned into a huge stealth tax that hits average voters a lot, far more than initially planned.
Selling tax cuts when most voters can see their taxes going up might prove tricky.
What did he do to welfare payments for media to call it a squeeze on them, it seems to have been lost in the noise.
What did he do to VAT? I was waiting to buy a 4K TV, will it be cheaper now?
If you don't mind waiting for a few weeks, a branch of JohnPye Auctions near you will be getting in a boatload of bankrupt stock tellies. They'll go for a fraction of the retail price. And if you can hang on until the new year there will be so many they will be more or less giving them away.
Thank you.
What’s the point though of a tax cutting budget to stop a recession, if my high street shop for tec is no cheaper 🤷♀️
Well it's all a little bit odd. The BoE are busy trying to reduce spending stimulus by increasing interest rates to curtail inflation, and at the very same time the CoE is giving tax cuts to stimulate spending growth and thus stoke inflation. Very strange.
A serious point on the telly front, try Richer Sounds.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Yes, the fall in sterling will cause commodity price inflation and we import oil, energy, food and raw commodities.
The weakness of sterling won't necessarily help exporters who are already struggling with surging prices. If the UK was self sufficient in energy production then it would be of great help, but we aren't so all it means is prices rising by 3-4% in the next few weeks unless the BoE puts up rates by at least 1% on Monday and then another 1% at the next regular meeting in November.
This is quite possibly the worst fiscal event/budget I've witnessed from any Chancellor. We've splurged £45bn in tax cuts and it will result in 90% of working people being and feeling poorer by the end of October. Mental.
You'd know better than me, but would an emergency rate increase from the BoE really help? I'd worry that it would, understandably, look like panic, and that would further damage confidence in the UK economy.
It would help, panic or not. It will help us sell gilts and avoid any risks of debt auction failures. That's the nightmare scenario IMO. We fail to sell nominal coupon gilts and face to resort to selling index linked ones to ensure there are buyers which will push up debt servicing costs to untenable levels.
This probably the most precarious the UK economy has been in for the last 40 years.
The morning after the day before and no matter your views of yesterday's budget statement, it cannot be denied it was dramatic and has changed the political debate all the way to GE 2024 which I would expect will be in October 24
I do support low taxes and a small state but this is a big gamble and very much contrary to where public opinion is, so you can say it was either brave or foolish
I notice opponents complain about the mail, express and other conservative supporting papers endorsing Kwarteng's budget but it is rather as pointless as it would be to expect the Guardian to acclaim the budget
It is noticeable that business groups from the CBI to the federation of small businesses have welcomed the measures and at least Truss and Kwarteng have buried Johnson's absurd f_ _ _ business attitude
Certainly it has given Labour an open goal and I do not expect much of a poll boost for Truss, but then I have been consistent on this maintaining that next Spring post the new tax year and maybe the coronation that polls will become important and provide a better prediction for 2024
Tony Danker, CBI director-general, said: “It’s not perfect – it’s just the beginning – but there’s plenty business can work with. The chancellor signalled more proposals to come this autumn and these will be vital to sustain momentum on growth.”
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
I asked PB’s biggest budget fan - @BartholomewRoberts - about the issue of fiscal drag yesterday. He didn’t reply.
So, how many times did the Chief Secretary to the Treasury use the word “growth” in that interview on the Today program? Feels like every single sentence that came out of his mouth!
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
Sorry, but that's fundamentally phoney.
I don't know who started the trend, maybe it's always been there, but every fiscal statement now seems to be a mixture of this year/ next year / sometime announcements that make it blooming hard to what is going to happen in any one pay packet.
Taking everything that's incoming, the magic number is about £150 000. Below that line, people will pay more tax next year than this, in large part because of the toxic interplay of high inflation and frozen thresholds. Not quite as much more as was on the table before yesterday, but more. Above that line, people will pay less tax.
The timing of the announcements is much less interesting than the timing of their impact. And the distribution of winners and losing-less-than-before-ers matters when you are running a democracy not playing with numbers on a spreadsheet for a think tank pamphlet.
(Oh, and borrowing this much will screw with exchange and interest rates, which will hurt the economy as well.)
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Woo-hoo! I'm not going to pay more tax becuse I am not getting a pay rise this year.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
Not really. The stoking of inflation will increase the numbers paying tax through fiscal drag as thresholds remain frozen. This is the basis of the IFS analysis. This assumes that people do get payrises near inflation of course.
The tax changes alone will leave most people worse off by the end of the parliament. Higher interest and inflation is on top of that.
To have a tax cutting budget that actually puts up the tax rate for most workers is quite demented.
You've got to admit, it's quite impressive to cut taxes and still charge almost everyone more in tax. That's a Bergholt Stuttley Johnson level of ineptitude.
It depends of course on the level of inflation, and whether pay keeps up to create fiscal drag.
It may actually be a reason that the KK mini-budget is not that disastrous in the longer term, by increasing government income through inflation, even if the short term is very unpleasant. This government has abandoned any pretense of managing inflation.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
Agree with every bit of that.
The reality is that most people in the country will be worse off in the near term whatever the government does. The budget, in that respect, was always going to be seen as ‘unfair’ to a large number. What’s indefensible is to have squandered the fiscal firepower they do have in such an inefficient manner.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
That's odd. Petrol at my local Tesco's was 186p in the summer. Now it is 162p. What are they moaning about?
The true costs (Costco is always cheapest) for diesel right now is 170.9 and unleaded 149.9. So the 162 you're being charged has a decent amount of profit from Tesco. The price if sterling had kept up with the dollar would be moving south to about £1.30.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
Not really. The stoking of inflation will increase the numbers paying tax through fiscal drag as thresholds remain frozen. This is the basis of the IFS analysis. This assumes that people do get payrises near inflation of course.
The tax changes alone will leave most people worse off by the end of the parliament. Higher interest and inflation is on top of that.
To have a tax cutting budget that actually puts up the tax rate for most workers is quite demented.
You've got to admit, it's quite impressive to cut taxes and still charge almost everyone more in tax. That's a Bergholt Stuttley Johnson level of ineptitude.
It depends of course on the level of inflation, and whether pay keeps up to create fiscal drag.
It may actually be a reason that the KK mini-budget is not that disastrous in the longer term, by increasing government income through inflation, even if the short term is very unpleasant. This government has abandoned any pretense of managing inflation.
Not sure about the last point. The scheme for energy subsidy is expected to take 4% or so off the headline rate of inflation. If that is the case then there will be knock on effects for wage claims etc. An awful lot depends on how long gas prices remain high of course. If they are still high in 6 months time the government, it seems to me, will have a pretty awful choice of continuing an unaffordable scheme or sending inflation right back up again.
So, how many times did the Chief Secretary to the Treasury use the word “growth” in that interview on the Today program? Feels like every single sentence that came out of his mouth!
I listened to that. A deeply unimpressive blusterer unable to engage with the questions.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
I understand that but my point is that savings rates are going to rocket as well
The morning after the day before and no matter your views of yesterday's budget statement, it cannot be denied it was dramatic and has changed the political debate all the way to GE 2024 which I would expect will be in October 24
I do support low taxes and a small state but this is a big gamble and very much contrary to where public opinion is, so you can say it was either brave or foolish
I notice opponents complain about the mail, express and other conservative supporting papers endorsing Kwarteng's budget but it is rather as pointless as it would be to expect the Guardian to acclaim the budget
It is noticeable that business groups from the CBI to the federation of small businesses have welcomed the measures and at least Truss and Kwarteng have buried Johnson's absurd f_ _ _ business attitude
Certainly it has given Labour an open goal and I do not expect much of a poll boost for Truss, but then I have been consistent on this maintaining that next Spring post the new tax year and maybe the coronation that polls will become important and provide a better prediction for 2024
Tony Danker, CBI director-general, said: “It’s not perfect – it’s just the beginning – but there’s plenty business can work with. The chancellor signalled more proposals to come this autumn and these will be vital to sustain momentum on growth.”
That seems like a somewhat cautious welcome only.
Trying to make a positive case for the Special Budgetary Operation is rather like trying to make a positive case for the Chernobyl disaster. Something along the lines of "well, it turned a vast area into a radioactive wasteland and killed thousands of people through deadly levels of irradiation, but at least it was good news for the concrete sarcophagus construction sector." It's all very sad.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
No it's a dreadful indictment on those setting the odds. They have no idea about the Conservative Party. No way on earth is Boris coming back.
Wallace way too short. Once Truss goes, it is very likely Wallace is persuaded to become PM in a coronation.
Oh come off it MM that's wishful thinking, it's Johnson, and he will likely as not win a honeymoon election.
I just hope and pray Liz hasn't emulsioned over the Lulu Lytle.
Funny how people in other parties love telling me what the Conservatives will do.
One thing that won't happen if Truss goes is a membership vote. It will be a coup. Change in 24 hours.
Oh, and Kwarteng on 19s? LOL. If Truss goes, Kwarteng goes as the architect of the fiscal policy that caused her downfall. Unless of course it is massively successful - and he is her anointed successor about 9 years down the line. But I'd be wanting more than 19s to tie up money on that outcome!
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
I doubt that the tax cuts for the super rich will encourage many more to move here, as in 2024 those benefits are likely going to disappear under a Starmer government.
The morning after the day before and no matter your views of yesterday's budget statement, it cannot be denied it was dramatic and has changed the political debate all the way to GE 2024 which I would expect will be in October 24
I do support low taxes and a small state but this is a big gamble and very much contrary to where public opinion is, so you can say it was either brave or foolish
I notice opponents complain about the mail, express and other conservative supporting papers endorsing Kwarteng's budget but it is rather as pointless as it would be to expect the Guardian to acclaim the budget
It is noticeable that business groups from the CBI to the federation of small businesses have welcomed the measures and at least Truss and Kwarteng have buried Johnson's absurd f_ _ _ business attitude
Certainly it has given Labour an open goal and I do not expect much of a poll boost for Truss, but then I have been consistent on this maintaining that next Spring post the new tax year and maybe the coronation that polls will become important and provide a better prediction for 2024
Tony Danker, CBI director-general, said: “It’s not perfect – it’s just the beginning – but there’s plenty business can work with. The chancellor signalled more proposals to come this autumn and these will be vital to sustain momentum on growth.”
That seems like a somewhat cautious welcome only.
Trying to make a positive case for the Special Budgetary Operation is rather like trying to make a positive case for the Chernobyl disaster. Something along the lines of "well, it turned a vast area into a radioactive wasteland and killed thousands of people through deadly levels of irradiation, but at least it was good news for the concrete sarcophagus construction sector." It's all very sad.
No matter business has welcomed the measures and they are the ones who provide jobs and invest for the future
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Move quick I suspect that offer won’t be there by the end of next week if not sooner.
I’m utterly shocked that I got a car loan on Tuesday at 2.8% Apr - somehow doubt that’s available today…
New automotive retail is in for a near term spanking.
Should say it was a separate loan as Mrs Eek does 25,000 miles a year so i buy second hand to destroy… the plan was an MG4 but the suitable version arrives next March and the current car won’t last that long.
It won’t just be new automotive that goes. Most people buy based on monthly cost and that’s going to increase rapidly as interest rates and risk go up..
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
We have to as the very direct question - was the purpose of the tax cuts actually to drive growth? Two extremes possible with shades of grey in-between: 1. Truss and Kwarteng absolutely convinced that trickle down works and huge tax cuts at the top will increase tax revenues and growth 2. T & K know this will do nothing of the sort, but they get to hand a vast bung to their patrons whilst wrecking the economy to set up Labour for pain when they take over
The Johnson government was openly corrupt with handing large sums to its friends and patrons, but this is on a completely different scale. That corruption was in the shadows, this is in the open. Do they no longer care that it looks this bad? Make hay whilst the sun shines, we're out at the next election anyway, so what the hell.
I think it is both but mostly 2. They have a thin shred of hope that 1 happens, because they are so ideological. But they know that 2 is the more likely outcome. 1972 is an encouraging precedent for them though - they handed Labour a mess in 1974 that couldn't get fixed, then Thatcher got in 5 years later and they were in power for almost two decades.
Call me naive but I suspect it's 1. Truss and Kwarteng absolutely convinced that trickle down works and huge tax cuts at the top will increase tax revenues and growth.
I think they're deluded in that but convinced of their own righteousness.
So they are running a massive, high-risk experiment on the country that it never voted for.
The divisions of the Tory leadership campaign roared back to the fore… with critics claiming the chancellor was trying to avoid scrutiny by refusing to publish economic forecasts from the independent budget regulator.
… compared by one senior party figure to the ill-fated “Barber budget” of 1972, which emulated a similar aim but ended in boom, soaring inflation and ultimately the demise of Ted Heath’s premiership.
“I’ve never known a government that has had so little support from its own backbenches, just four sitting days in,” observed one MP.
“I completely despair, because I’m a member of a party that stands up for the squeezed middle not the very rich. This will be politically toxic and economically dubious,” said another MP present for the statement.
… “It’s the richest we’re helping while the poorest are suffering the most,” was one northern MP’s stark assessment.
“Everybody is distraught at the reshuffle and the way it’s been handled,” said one person recently ousted from the government. “Looking ahead, you’re going to have a situation where, unless some goodwill is extended, people will look for a cause to lay a marker down to make clear their unhappiness.”
Sunak’s supporters said they were more likely to boycott the Conservative party conference and ruminate over WhatsApp with other frustrated colleagues over the following few weeks of recess.
Ex coalition leader, orange book, Ed Davey is perfectly positioned to offer something to sound money Cameron era Tories
They have a huge opportunity, but are they still too weak to grab it?
Yes, unfortunately.
More like the curate's egg, I think. Excellent in places. And it will be seats where the Lib Dems are flourishing now that the Tories will take the hardest hit.
Readers would do well to follow the local election and byelections. If there is a strong Lib Dem organisation, strong enough to win the Parliamentary seat, they will be showing up in local government elections now.
Katharine Birbalsingh, Government's social mobility tsar, comes out against grammar schools.
"It's not wrong to suggest in the day grammar schools would propel certain working-class children forward. I am not sure they do that so much nowadays."
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
I understand that but my point is that savings rates are going to rocket as well
Still heavily negative in real terms, indeed more negative than they have been in years. Inflation is the nemesis of any form of saving, whether cash or in the form of capital in a house.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Yes, I was thinking Sunak might have a chance in the event of an early Truss crash.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
I understand that but my point is that savings rates are going to rocket as well
Savings rates will crawl upwards because the banks will widen the difference between interest on loans and interest on savings to make more profit. And any pathetic amount earned by savers will be effectively wiped out ten or twenty times over by the inflationary erosion of the value of their capital.
The Government is, of course, banking on most savers being too lazy to switch banks, or too innumerate and plain dense to comprehend the situation, and therefore jumping up and down with joy when the interest on their savings creeps up from 0.2% to 0.5%.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
I'm happy about it though, as it is one of the first times ever that someone will moan about a 'stealth' tax and actually have something of a point.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
I understand that but my point is that savings rates are going to rocket as well
Why? There is plenty of evidence that banks know how to price savings low.
The only way saving rates are going to massively increase is if ‘ when Banks start to actual need retail savings and I just don’t see that occurring…
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
The Bank of England would have dropped another ball (if they had any left to drop) by only increasing base rates by 0.5%. I think that had more effect on the price of Sterling than the budget and, of course, that has inflationary effects too. The incompetence of the present governor is a problem that the government is going to have to address. He's a liability.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Move quick I suspect that offer won’t be there by the end of next week if not sooner.
I’m utterly shocked that I got a car loan on Tuesday at 2.8% Apr - somehow doubt that’s available today…
New automotive retail is in for a near term spanking.
I got 2.78% banked in March and took delivery of my new car on the 1st so I think I got lucky. The Mazda 3 saloon is a fine car by the way. Blows the socks of the German entry level models.
I fixed my mortgage in 2016 for ten years at 3.3%, which was expensive at the time but I’m sort of glad we didn’t go for the tracker or the five year fix. I think I’m going to be able to pay off the mortgage once probate clears which is a huge relief and means I don’t have to ditch a job I enjoy to pay my bills. Not yet anyway.
I don't know if domestic fiscal multiplier theory works 100 years after Keynes - with debt ratios nudging 100% of national product across the rich world, I'd imagine any temporary stimulus like Kwarteng's gets saved against future tax quite rapidly or spent on exports, regardless of who first handles the goodies.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
It seems little is being said about saving rates but they look like rocketing from today
Because working people make the economy grow and higher interest rates hurt working people more than they help.
I understand that but my point is that savings rates are going to rocket as well
Still heavily negative in real terms, indeed more negative than they have been in years. Inflation is the nemesis of any form of saving, whether cash or in the form of capital in a house.
Not of the latter. Firstly this Government is still determined to pump house prices (hence the stamp duty cut) and Labour won't dare to do any different. Second, housing costs are so ludicrous that the only sensible option for anybody is to buy if you can possible afford the repayments, so at least there is some prospect of the situation easing and, eventually, ending. People stuck renting will end up with the choice of death by starvation or working until they expire through old age.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Have you thought about part funding with 0% spend credit cards and 0% balance transfer cards with zero transfer fee. I think we discussed this a few years ago. When I had a mortgage I funded 100k of the loan this way. Need to be sure you can pay off or transfer the balance before the interest rates kick in but you normally get 2 years to plan that. I have done a lot less now I don't have a mortgage and interest rates have been low, but I still have £30k, not due to be paid of for 2 years which I invest.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Woo-hoo! I'm not going to pay more tax becuse I am not getting a pay rise this year.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
The investment zones also include no Employers NI for new hires on the first £50k of their salary. Won't do anything for levelling-up when one of the areas in discussions to get this new status is Greater London - looks more like a way to radically change tax and planning law by stealth. We could very quickly see more of the country subject to these rules than not.
Fundamentally the Special Fiscal Operation looks like it was intended to massively undermine the tax base. Those pointing to the highest tax take for 74 years might well think, "and about time too!" but normally when British governments have sought to cut taxes they have made some nod towards cutting spending in order to balance the books. The lack of any pretence on balancing the books is what is most notable about yesterday's SFO. After all, Osborne cut taxes on the highest earners before. Not balancing the books is what takes us into new territory, following the path laid by the GOP in the US.
Katharine Birbalsingh, Government's social mobility tsar, comes out against grammar schools.
"It's not wrong to suggest in the day grammar schools would propel certain working-class children forward. I am not sure they do that so much nowadays."
Irrelevant. Grammars make octogenarian Express readers piss their continence pads with excitement. Whichever toxic imbecile is Education Secretary this week is probably already drafting a white paper focussed on bringing them back.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Yes, I was thinking Sunak might have a chance in the event of an early Truss crash.
Except that, if Truss crashes, her successor really is taking over as a placeholder before the Conservatives lose big in late 2024.
That requires a curious mixture of attributes, because it won't be fun at all. Who has the stoicism to pull that off with dignity and get past the nutters in the party?
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
No it's a dreadful indictment on those setting the odds. They have no idea about the Conservative Party. No way on earth is Boris coming back.
Wallace way too short. Once Truss goes, it is very likely Wallace is persuaded to become PM in a coronation.
Oh come off it MM that's wishful thinking, it's Johnson, and he will likely as not win a honeymoon election.
I just hope and pray Liz hasn't emulsioned over the Lulu Lytle.
Funny how people in other parties love telling me what the Conservatives will do.
One thing that won't happen if Truss goes is a membership vote. It will be a coup. Change in 24 hours.
Oh, and Kwarteng on 19s? LOL. If Truss goes, Kwarteng goes as the architect of the fiscal policy that caused her downfall. Unless of course it is massively successful - and he is her anointed successor about 9 years down the line. But I'd be wanting more than 19s to tie up money on that outcome!
Wallace is the value in that field.
I neither know nor care, at this point, except for betting purposes. If everything goes tits up then who the next leader is doesn’t matter. But your Conservative party predictions are always with paying attention to if you’re betting.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Move quick I suspect that offer won’t be there by the end of next week if not sooner.
I’m utterly shocked that I got a car loan on Tuesday at 2.8% Apr - somehow doubt that’s available today…
New automotive retail is in for a near term spanking.
Should say it was a separate loan as Mrs Eek does 25,000 miles a year so i buy second hand to destroy… the plan was an MG4 but the suitable version arrives next March and the current car won’t last that long.
It won’t just be new automotive that goes. Most people buy based on monthly cost and that’s going to increase rapidly as interest rates and risk go up..
Automotive loans and PCP are the new sub-prime. There are an awful lot of new Audis outside the social housing near me. Either that or the drug pushing business is booming.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
You example above is why I don’t think they had an actual clue or any help with any of this.
There are a whole number of things they could have done way better with a little thought but instead it’s almost like they’ve been given a wish list by some people and implemented them without a seconds thought or secondary review.
In the scale of “organisations not to annoy if you want to retain core Tory support”, the RSPB is probably in third place after the National Trust and the RNLI.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Yes, I was thinking Sunak might have a chance in the event of an early Truss crash.
Except that, if Truss crashes, her successor really is taking over as a placeholder before the Conservatives lose big in late 2024.
That requires a curious mixture of attributes, because it won't be fun at all. Who has the stoicism to pull that off with dignity and get past the nutters in the party?
St Theresa. People talking about a previous PM coming back have been looking at the wrong target. Its astonishing how fast the Maybot's reputation has been rebuilt from her "ahem" position on the back benches.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Honestly if you can afford to pay the penalty it might be something to look into, our forecast for interest rates next December was increased for 4.5% to 5.75% which implies mortgage rates in excess of 7%.
The Bank of England would have dropped another ball (if they had any left to drop) by only increasing base rates by 0.5%. I think that had more effect on the price of Sterling than the budget and, of course, that has inflationary effects too. The incompetence of the present governor is a problem that the government is going to have to address. He's a liability.
I wouldn't trust Truss to replace the BoE governor with someone determined to stop inflation. Indeed more likely someone willing to let it rip.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Yes, I was thinking Sunak might have a chance in the event of an early Truss crash.
Except that, if Truss crashes, her successor really is taking over as a placeholder before the Conservatives lose big in late 2024.
That requires a curious mixture of attributes, because it won't be fun at all. Who has the stoicism to pull that off with dignity and get past the nutters in the party?
Yes that's fair. But to have your name on the list of British PMs, even if only briefly?
Hell, I'd do it.
(I'd use it as an opportunity to impose a 10% wealth tax on assets over £1m to pay off the national debt, and I'd also remove the whip from everyone who voted for Truss, so splitting the Tories, thus cementing my place in history.)
Right wing media dictionary: Labour borrowing to fund better public services and infrastructure - a reckless gamble. Tory borrowing to make very rich people richer - an audacious gamble.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Woo-hoo! I'm not going to pay more tax becuse I am not getting a pay rise this year.
Thought I was hard done by with 4% !
Appraisal feedback was very good. Strong year, contributed a lot, team player etc etc. here’s a piss poor increase.
Only those earning over £155k are actually seeing real tax cuts.
But this is interesting, it's quite different from the narrative out there on social media. It's not so much the poor losing out, as above-average earners paying for COVID lockdown largesse.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
Kwarteng went for the headline of ‘I’ve abolished the top rate’ instead. He’s supposed to be smart, but that decision shows he’s deeply unserious.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Woo-hoo! I'm not going to pay more tax becuse I am not getting a pay rise this year.
Thought I was hard done by with 4% !
Appraisal feedback was very good. Strong year, contributed a lot, team player etc etc. here’s a piss poor increase.
We are getting a one-off "cost of living" payment in October, but that is coming out of next year's performance pot.
Tempting to junk my existing mortgage deal with the EPR penalty and fix with Barclays for 7 years at 3.49%
Move quick I suspect that offer won’t be there by the end of next week if not sooner.
I’m utterly shocked that I got a car loan on Tuesday at 2.8% Apr - somehow doubt that’s available today…
New automotive retail is in for a near term spanking.
Should say it was a separate loan as Mrs Eek does 25,000 miles a year so i buy second hand to destroy… the plan was an MG4 but the suitable version arrives next March and the current car won’t last that long.
It won’t just be new automotive that goes. Most people buy based on monthly cost and that’s going to increase rapidly as interest rates and risk go up..
Automotive loans and PCP are the new sub-prime. There are an awful lot of new Audis outside the social housing near me. Either that or the drug pushing business is booming.
PCP are weird though. The level is based on the difference between the value now and the value when it’s returned, which means that posh brands often end up being way cheaper than Vauxhall / ford are even when the initial retail price is lower.
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
No it's a dreadful indictment on those setting the odds. They have no idea about the Conservative Party. No way on earth is Boris coming back.
Wallace way too short. Once Truss goes, it is very likely Wallace is persuaded to become PM in a coronation.
Oh come off it MM that's wishful thinking, it's Johnson, and he will likely as not win a honeymoon election.
I just hope and pray Liz hasn't emulsioned over the Lulu Lytle.
Funny how people in other parties love telling me what the Conservatives will do.
One thing that won't happen if Truss goes is a membership vote. It will be a coup. Change in 24 hours.
Oh, and Kwarteng on 19s? LOL. If Truss goes, Kwarteng goes as the architect of the fiscal policy that caused her downfall. Unless of course it is massively successful - and he is her anointed successor about 9 years down the line. But I'd be wanting more than 19s to tie up money on that outcome!
Wallace is the value in that field.
Why didn't Fat Legolas run last time? He must know he hasn't got a hope of the NATO job. (Not a woman, not Eastern European, not on good terms with the EU)
I don’t think much has changed, but the worrying conclusion for the fracker brigade is the one stating “predicting HF induced seismic events remains challenging”. That’s civil service code for “we can’t tell if any individual well will crack your foundations”.
Only those earning over £155k are actually seeing real tax cuts.
But this is interesting, it's quite different from the narrative out there on social media. It's not so much the poor losing out, as above-average earners paying for COVID lockdown largesse.
Not really. I don't have it to hand but try to picture that graph with the y-axis as a % of income rather than an nominal £ scale. Percentage wise the lowest earning tax payers (including those brought into taxation by inflation) are paying the biggest percentage.
Edit: Biggest tax increase is 3.6% of income at £16,000 earnings.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
You example above is why I don’t think they had an actual clue or any help with any of this.
There are a whole number of things they could have done way better with a little thought but instead it’s almost like they’ve been given a wish list by some people and implemented them without a seconds thought or secondary review.
Indeed, one of the reasons people can't get GP appointments is due to this oddity as well. Loads of GPs are going part time to avoid the cliff. They don't earn over £150k to make it worthwhile to stay full time but it is enough that should they stay full time it means £16k in childcare costs and marginal rates at 60%, plus they can't make pension AVCs easily without attracting punitive taxes.
A working parent of two kids is better off earning £99.9k at 4 days per week than £125k at 5 days per week. Between those two salaries there's around a £10k increase on net pay buy a £16k increase in childcare costs. It's also inexpensive to fix.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
The withdrawal of the personal allowance at £105 000 causes a marginal rate of 61%, so a bit of a high tax zone before going back to 41% at £125 000.
It does affect behaviour. Some of my colleagues have cited this as well as the annual allowance rules as a reason to cut hours.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
Journalism at its best. Every one who pays income tax or NI, is better off as a result of the measures announced yesterday.
Not really, this budget will add hundreds of pounds per month onto mortgage costs and extend our period of high inflation by an extra 6 months. The small saving on NI will be wiped out by these twin costs. Only people earning £250k or more will actually be better off IMO.
The budget didn’t mention mortgage costs (I assume you mean changes in interest rates, set by the independent BoE), and inflation has a whole number of causes.
As I said, terrible journalism, most people will be better off *as a result of the changes in taxation announced yesterday* by the Chancellor.
But the drop in sterling is because of the tax changes. Even if interest rates don't go up the drop in sterling adds ~4% onto commodity prices which sends consumer prices up by 2-3%, that alone wipes out any tax cuts for all but the top 10% of earners. Add in interest rates going up and now you're in a situation where 99% of people are worse off.
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
I share your perplexity. A lot of that £45bn is going to be saved with zero multplier effects. I think the intention must be to attract new high earners to the City or elsewhere by reducing their personal taxation and their corporate taxation if they base their business here as well as removing the rather silly restrictions on bonuses. It's possible that will happen to a small extent but not on a scale that will make a difference.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
Junking the bonus cap would have been enough to retain and get new higher earners in the city. No need for the additional rate cut. As I pointed out last night the £100k cliff edges for childcare and allowance withdrawal are more damaging than the additional rate. One of our bean counters suggested yesterday that removing these would cost £2.5bn but generate an additional £10-12bn in economic activity as high earners take on more work without worrying about having to fund childcare out of pocket and the idiotic 60% marginal rate.
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
You example above is why I don’t think they had an actual clue or any help with any of this.
There are a whole number of things they could have done way better with a little thought but instead it’s almost like they’ve been given a wish list by some people and implemented them without a seconds thought or secondary review.
They see help at spotting realism as Negative Treasury Orthodoxy.
Now orthodoxy isn't always right, but it's brave to gamble on it being wrong
Only those earning over £155k are actually seeing real tax cuts.
But this is interesting, it's quite different from the narrative out there on social media. It's not so much the poor losing out, as above-average earners paying for COVID lockdown largesse.
Only those earning over £155k are actually seeing real tax cuts.
But this is interesting, it's quite different from the narrative out there on social media. It's not so much the poor losing out, as above-average earners paying for COVID lockdown largesse.
Not really. I don't have it to hand but try to picture that graph with the y-axis as a % of income rather than an nominal £ scale. Percentage wise the lowest earning tax payers (including those brought into taxation by inflation) are paying the biggest percentage.
Why are those earning 40-50k (sort of) relative winners ?
Starmer 1.83 Johnson 15 Badenoch 17 Kwarteng 19 Wallace 21 25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
If Trussnomics collapses in a Sterling crisis and Barberesque boom, the current regime would not be replaced with another tax cutting ideologue like Badenoch.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
Yes, I was thinking Sunak might have a chance in the event of an early Truss crash.
Except that, if Truss crashes, her successor really is taking over as a placeholder before the Conservatives lose big in late 2024.
That requires a curious mixture of attributes, because it won't be fun at all. Who has the stoicism to pull that off with dignity and get past the nutters in the party?
St Theresa. People talking about a previous PM coming back have been looking at the wrong target. Its astonishing how fast the Maybot's reputation has been rebuilt from her "ahem" position on the back benches.
No, she’s enjoying ‘I told you so’ from the backbenches way too much, and making a very good living. She’s not going to put herself through that again.
Today are leading with a think tank opinion, everyone but very rich WORSE OFF after a £45B giveaway budget.
Really?
When you include all the tax changes that are happening (from previous budgets) for the coming tax year, then the one change that dwarfs all the others is fiscal drag from the frozen thresholds and a 10% rate of inflation.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Woo-hoo! I'm not going to pay more tax becuse I am not getting a pay rise this year.
Thought I was hard done by with 4% !
Appraisal feedback was very good. Strong year, contributed a lot, team player etc etc. here’s a piss poor increase.
I work for the public sector. We’ve not had our settlement yet. I’m going to try to negotiate a specialist skills allowance but im not holding out hope.
Comments
I will say, and probably be mocked for this, that for many it’s the prevailing media crisis reporting that is the main issue. For the most in need of help the energy cap is going to make it really hard. For the rest it will be annoying, but not terminal.
MP explains how mini-budget & trickle down economics is like “watering a garden. Selectively” https://twitter.com/RosieisaHolt/status/1573353483566288896/video/1
Measured, nuanced, open to criticism, but always clear. You may not agree with it, but you can engage with it. https://twitter.com/julianHjessop/status/1573560779227500546
The OBR have savaged this and been blocked from publishing. The Treasury Select Committee is horrified but can't act as suspended. The Commons itself had 2 hours yesterday and thats it. There's barely a thin coating of democracy left, especially with an economic programme this crazy and this disconnected from what the government was elected to do.
branch of JohnPye Auctions near you will be getting in a boatload of bankrupt stock tellies. They'll go for a fraction of the retail price. And if you can hang on until the new year there will be so many they will be more or less giving them away.
The tax changes alone will leave most people worse off by the end of the parliament. Higher interest and inflation is on top of that.
To have a tax cutting budget that actually puts up the tax rate for most workers is quite demented.
That single decision is such a massive increase in tax. It makes the 1p cut in the basic rate of income tax such a cynical move. Almost everyone will pay more income tax, but HMG will go around saying that they've cut income tax.
Ouch!
Any buyers?
As one of my colleagues pointed out yesterday, it's not necessarily the government borrowing an additional £45bn that has spooked markets, it is that the City and Wall Street don't understand why the money has been spent on measures that have low or negative economic multipliers. Giving already rich people a big tax cut won't yield anywhere near the additional growth we need to balance this off. As evidenced in the NEISR forecast yesterday.
As you know I'm generally more positive on the UK than most on here and was willing to be convinced by the need to stimulate growth with targeted tax cuts. Well now that we've got the tax cuts I don't see how they stimulate growth in the long term.
What’s the point though of a tax cutting budget to stop a recession, if my high street shop for tec is no cheaper 🤷♀️
Previously I had been clear that once we start trading properly and hiring people, my contractor status would become untenable and I would need to be employed by the new UK business to run it. Is that still true?
Starmer 1.83
Johnson 15
Badenoch 17
Kwarteng 19
Wallace 21
25 bar
The Oaf being in 2nd spot is a dreadful indictment on the Conservative Party. They have run out of fuel.
What are they moaning about?
Although you will have a slight different issue as an office holder but even then I suspect you could separate things out.
In many ways the biggest changes yesterday were completely hidden - there is this one on tax and a different one of Thursday where all EU based employment law was quietly dropped from January 1st 2024 unless explicitly relegislated.
1. Truss and Kwarteng absolutely convinced that trickle down works and huge tax cuts at the top will increase tax revenues and growth
2. T & K know this will do nothing of the sort, but they get to hand a vast bung to their patrons whilst wrecking the economy to set up Labour for pain when they take over
The Johnson government was openly corrupt with handing large sums to its friends and patrons, but this is on a completely different scale. That corruption was in the shadows, this is in the open. Do they no longer care that it looks this bad? Make hay whilst the sun shines, we're out at the next election anyway, so what the hell.
The morning after the day before and no matter your views of yesterday's budget statement, it cannot be denied it was dramatic and has changed the political debate all the way to GE 2024 which I would expect will be in October 24
I do support low taxes and a small state but this is a big gamble and very much contrary to where public opinion is, so you can say it was either brave or foolish
I notice opponents complain about the mail, express and other conservative supporting papers endorsing Kwarteng's budget but it is rather as pointless as it would be to expect the Guardian to acclaim the budget
It is noticeable that business groups from the CBI to the federation of small businesses have welcomed the measures and at least Truss and Kwarteng have buried Johnson's absurd f_ _ _ business attitude
Certainly it has given Labour an open goal and I do not expect much of a poll boost for Truss, but then I have been consistent on this maintaining that next Spring post the new tax year and maybe the coronation that polls will become important and provide a better prediction for 2024
No-one.
A serious point on the telly front, try Richer Sounds.
This probably the most precarious the UK economy has been in for the last 40 years.
That seems like a somewhat cautious welcome only.
Wallace way too short. Once Truss goes, it is very likely Wallace is persuaded to become PM in a coronation.
I don't know who started the trend, maybe it's always been there, but every fiscal statement now seems to be a mixture of this year/ next year / sometime announcements that make it blooming hard to what is going to happen in any one pay packet.
Taking everything that's incoming, the magic number is about £150 000. Below that line, people will pay more tax next year than this, in large part because of the toxic interplay of high inflation and frozen thresholds. Not quite as much more as was on the table before yesterday, but more. Above that line, people will pay less tax.
The timing of the announcements is much less interesting than the timing of their impact. And the distribution of winners and losing-less-than-before-ers matters when you are running a democracy not playing with numbers on a spreadsheet for a think tank pamphlet.
(Oh, and borrowing this much will screw with exchange and interest rates, which will hurt the economy as well.)
I’m utterly shocked that I got a car loan on Tuesday at 2.8% Apr - somehow doubt that’s available today…
It may actually be a reason that the KK mini-budget is not that disastrous in the longer term, by increasing government income through inflation, even if the short term is very unpleasant. This government has abandoned any pretense of managing inflation.
The infrastructure and investment zones are potentially interesting. If this succeeds in attracting new businesses to depressed areas it could do a lot for levelling up and the red wall seats. The benefits include no rates and no stamp duty along with pretty much no planning controls. But the devil may be in the detail of the last one which seems to need to be agreed with local authorities.
The reality is that most people in the country will be worse off in the near term whatever the government does. The budget, in that respect, was always going to be seen as ‘unfair’ to a large number.
What’s indefensible is to have squandered the fiscal firepower they do have in such an inefficient manner.
I just hope and pray Liz hasn't emulsioned over the Lulu Lytle.
So the 162 you're being charged has a decent amount of profit from Tesco.
The price if sterling had kept up with the dollar would be moving south to about £1.30.
Wallace is the dullard on which people project their hopes.
It may be the second coming of Johnson, or perhaps the revenge of Sunak, who did rather better in the members poll than expected.
A deeply unimpressive blusterer unable to engage with the questions.
One thing that won't happen if Truss goes is a membership vote. It will be a coup. Change in 24 hours.
Oh, and Kwarteng on 19s? LOL. If Truss goes, Kwarteng goes as the architect of the fiscal policy that caused her downfall. Unless of course it is massively successful - and he is her anointed successor about 9 years down the line. But I'd be wanting more than 19s to tie up money on that outcome!
Wallace is the value in that field.
Business wants a longer term outlook.
It won’t just be new automotive that goes. Most people buy based on monthly cost and that’s going to increase rapidly as interest rates and risk go up..
I think they're deluded in that but convinced of their own righteousness.
So they are running a massive, high-risk experiment on the country that it never voted for.
Readers would do well to follow the local election and byelections. If there is a strong Lib Dem organisation, strong enough to win the Parliamentary seat, they will be showing up in local government elections now.
Non mini-Budget story on @LBC
Katharine Birbalsingh, Government's social mobility tsar, comes out against grammar schools.
"It's not wrong to suggest in the day grammar schools would propel certain working-class children forward. I am not sure they do that so much nowadays."
https://twitter.com/theousherwood/status/1573213934408155139
The Government is, of course, banking on most savers being too lazy to switch banks, or too innumerate and plain dense to comprehend the situation, and therefore jumping up and down with joy when the interest on their savings creeps up from 0.2% to 0.5%.
The only way saving rates are going to massively increase is if ‘ when Banks start to actual need retail savings and I just don’t see that occurring…
I think my suggestion from yesterday would have been best, remove the cliff edges and bring the additional rate down to 43% and start it at £100k. That way works for everyone and eliminates the odd disincentives to work. Right now we're dealing with this situation at work, one of my staff is now moving down to 4 days per week because she can't afford the pay rise that would lose her the government funded childcare. It's completely mad.
I fixed my mortgage in 2016 for ten years at 3.3%, which was expensive at the time but I’m sort of glad we didn’t go for the tracker or the five year fix. I think I’m going to be able to pay off the mortgage once probate clears which is a huge relief and means I don’t have to ditch a job I enjoy to pay my bills. Not yet anyway.
Fundamentally the Special Fiscal Operation looks like it was intended to massively undermine the tax base. Those pointing to the highest tax take for 74 years might well think, "and about time too!" but normally when British governments have sought to cut taxes they have made some nod towards cutting spending in order to balance the books. The lack of any pretence on balancing the books is what is most notable about yesterday's SFO. After all, Osborne cut taxes on the highest earners before. Not balancing the books is what takes us into new territory, following the path laid by the GOP in the US.
https://ifs.org.uk/articles/mini-budget-response
Only those earning over £155k are actually seeing real tax cuts.
That requires a curious mixture of attributes, because it won't be fun at all. Who has the stoicism to pull that off with dignity and get past the nutters in the party?
But your Conservative party predictions are always with paying attention to if you’re betting.
There are a whole number of things they could have done way better with a little thought but instead it’s almost like they’ve been given a wish list by some people and implemented them without a seconds thought or secondary review.
http://twitter.com/RSPBEngland/status/1573366815568580613
In the scale of “organisations not to annoy if you want to retain core Tory support”, the RSPB is probably in third place after the National Trust and the RNLI.
Hell, I'd do it.
(I'd use it as an opportunity to impose a 10% wealth tax on assets over £1m to pay off the national debt, and I'd also remove the whip from everyone who voted for Truss, so splitting the Tories, thus cementing my place in history.)
Labour borrowing to fund better public services and infrastructure - a reckless gamble.
Tory borrowing to make very rich people richer - an audacious gamble.
Appraisal feedback was very good. Strong year, contributed a lot, team player etc etc. here’s a piss poor increase.
He’s supposed to be smart, but that decision shows he’s deeply unserious.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1105675/BEISInducedSeismicityReportOR220501A.pdf
I don’t think much has changed, but the worrying conclusion for the fracker brigade is the one stating “predicting HF induced seismic events remains challenging”. That’s civil service code for “we can’t tell if any individual well will crack your foundations”.
Edit: Biggest tax increase is 3.6% of income at £16,000 earnings.
A working parent of two kids is better off earning £99.9k at 4 days per week than £125k at 5 days per week. Between those two salaries there's around a £10k increase on net pay buy a £16k increase in childcare costs. It's also inexpensive to fix.
It does affect behaviour. Some of my colleagues have cited this as well as the annual allowance rules as a reason to cut hours.
Now orthodoxy isn't always right, but it's brave to gamble on it being wrong
She’s not going to put herself through that again.