The Bank’s interest rate policy

I have set out before the issues surrounding the Bank of England’s powers . What is not in doubt is the Bank of England has the independent duty to set interest rates. There is political agreement by all main parties that they should have and do  have this power. There is usually no government or official opposition criticism of the way they use this power to show people it is independent.

In a democracy there should however be proper debate about how this aspect of economic policy is conducted, and there are plenty of external commentators who express views and provide free advice to the Bank. The last two weeks have been mainly about the level of interest rates needed in the UK to control the inflation that has been allowed to develop. The important statement came on Thursday of last week from the MPC of the Bank when they told us they were going to start selling bonds out of their portfolio. The purpose of this is to lower the price of bonds and to increase longer term interest rates. The bonds after all had been bought to do the opposite, to raise their price and cut rates. The accompanying statements and forecast were interpreted by the market as meaning there were substantial short and longer term rate rises to come, which triggered a progressive sell off of bonds.This was on top of a global sell off triggered in the USA by the Federal Reserve Board who also signalled higher US rates and a large selling programme of US bonds which hit UK and European bonds too.

Some market participants criticised a couple of the measures in  the Financial Statement on the Friday but the main focus of the gilt market remained on rates and bond prices. The markets had not been unsettled by the very expensive one off help for business and household energy bills announced a week ago Wednesday.  The selling pressures in the market accelerated during the following week, reaching a crescendo on Wednesday.

The Bank then produced a statement which said it was changing policy dramatically to launch a new round of Quantitative easing with  buying of longer bonds because they had come to see long interest rates were too high. This was argued on financial stability grounds. Many pension funds have geared positions in gilts, and were finding it difficult to raise money to pay the extra calls on their geared derivatives. Bond prices on Wednesday were wildly volatile on news of Bank intentions. Nothing changed on Wednesday concerning tax cuts to affect prices .It should be clear to  anyone the extreme volatility on Wednesday was about the Bank’s interest rate policy, not a delayed response to the Financial statement.

The Bank’s statement went on to say the bond buying would end after two weeks and then sales of bonds would resume, and interest rates generally would rise. It seems that the part of the Bank that rightly worries about financial stability wants a different policy to the Monetary Policy Committee. I hope the Bank will think through what level of rates they think necessary to bring inflation down to the targets they now forecast they will hit, to give greater clarity. If it allows markets again to think it wants higher  longer term rates it will create a nasty slump and balloon the very government deficit being argued about.I doubt the Bank can resume bond sales anytime soon without forcing rates too high.

Of course the Bank needs to do enough to bring inflation down. Its own forecasts say it has. It needs to tell us more about how it judges the rates needed to do this. The obvious way would be a money target like the Chinese who have low inflation. Money and credit excess last year could have warned them they were too loose and getting inflation wrong. Money and credit now points to falling inflation as it is tight in real terms.

155 Comments

  1. Peter Wood
    September 30, 2022

    Good Morning,

    The BoE is the independent setter of interest rates is it?

    So when the BoE buys government bonds (Gilts) under the QE programme, who sets the yield government pays on those bonds?

    1. Gary Megson
      September 30, 2022

      It’s Mr Redwood’s usual attempt to distract attention from the real culprits here – the utterly incompetent Conservative Party that has been in power for twelve disastrous years

      1. Bloke
        September 30, 2022

        Not so Gary.
        Stakes inflate because people make judgements about what others might and might not do and panic. Nobody knows how millions of others will respond so their choice gambles. Some react instantly. Many go with those early gamblers by assuming their fast response signifies advance knowledge worth copying. Most follow others assuming the majority knows best. Those who make the right decision know only in retrospect. Placing a bet on turmoil seems a certainty yet would result in loss.

      2. ukretired123
        September 30, 2022

        Reply to GMegson
        You sound like Capt Hindsight and his Marxist “Keep the Red Flag flying” doomsters who know little about financial markets and and even less about real world economics and think communist style nationalisation is the answer to everything.
        DT today noted “While Carney was happy to lambast the government for creating chaos in financial markets, he and Andrew Bailey, the current governor of the Bank, might have questions of their own to answer about the LDI implosion that almost triggered a full market meltdown”.

        1. Ian Wragg
          September 30, 2022

          Interesting article by Lord Frost today telling how the chaos was brought about my Remainiacs and aided by other international bodies like the IMF
          Rishi the WEF placement was defeated so everything must be done to discredit Liz and her government.
          As Hannan says if we don’t change course from the failed policies of the last 20 years we are doomed to a spiral of decline
          The wet limp dumb tories need to get behind the government
          At least they have a plan.

          1. Pauline
            September 30, 2022

            So everyone’s got it in for the UK! They’re all out to get us! We’re right, everyone else is wrong!

      3. Fedupsoutherner
        September 30, 2022

        Gary. You have a short memory. Don’t you remember when the government was giving out furlow payments which side of the house was calling for more and wanting lockdown for longer?

      4. Bob Dixon
        September 30, 2022

        Gary

        Grow a pair

      5. Lifelogic
        September 30, 2022

        I tend to agree we have had very poor government from these fake Conservatives under the tax to death socialist & dishonest remainers Cameron/Osborne, May/Hammond and the manifest ratters also tax to death Borris/Carrie/Sunak – with vast tax increases, the moronic net zero agenda, the idiotic extended lockdown, the largely ineffective and often dangerous vaccines, the vast increase in red tape and the appalling government waste and general incompetence. Boris and his medical & climate/energy experts got nearly all the big things wrong but he did save us from Corbyn/SNP.

        But Starmer wanted all this agenda & more. Starmer/Sturgeon/Ed Davey is an appalling prospect please save us Ms Truss.

      6. IanT
        September 30, 2022

        Sir John briefly touched on the Fed today Gary – but I hear virtually nothing from the mainstream (UK) Media about what the Fed is actually up to. Quite amazing, as it’s all over the US media but completely ignored here.

        Most US commentators now accept that Powell isn’t going to ‘pivot’ and (use QE) to bail out falling US equity and bond markets. One (former) FED employee last night stated that it was now clear Powell was determined to drive out inflation, which obviously involves deflating US asset bubbles, driving up US unemployment and hitting property values. She also acknowledged that “other developed economies” would be deeply impacted by these actions – it’s inevitable. There is no avoiding the impact of this here in UK. The US Dollar is still the globle reserve currency and the global economy is going to be significantly slowed. All the UK government can try to do is mitigate the full impact of the coming global recession. They cannot stop it.

    2. PeteB
      September 30, 2022

      Problem here isn’t the independence of the BofE, it’s the stupidity of the initial announcement. If the largest stallholder in the market announced he is coming along next week to sell sack-loads of turnips, what do all the buyers (and other sellers) do beforehand? No surprise that gilt prices fell/yields rose after the announcement and ahead of the BofE action.

      Same thing happeend when Gordon Brown announced the sale of UK gold 2 decades ago, successfully cashing in at the bottom of the market.

      Turnips, one and all.

    3. Nottingham Lad Himself
      September 30, 2022

      The only reason interest rates are such a big issue is because of the disastrous, reckless ineptitude of Sir John’s party of government, which has caused the pound to tank and placed the BoE under enormous pressure to do something to help.

    4. Peter
      September 30, 2022

      “It should be clear to anyone the extreme volatility on Wednesday was about the Bank’s interest rate policy, not a delayed response to the Financial statement.”

      A rather sweeping assumption. Whatever the reasons for the volatility the government should have people in place that can shape the narrative in the media.

      The reporting in the press indicates they failed spectacularly to do this. Hence the reputation of this new government is already at a very low ebb.

      1. George Brooks.
        September 30, 2022

        Good heavens Peter where have you been these last few years? The BBC, Sky News, The Guardian, The Independent, plus a few others have distorted and twisted the news, firstly to oust Boris and now they see a joint target of Truss and the Conservative government. Pigs will fly before anyone could shape the narrative of those far-left leaning journalists who are getting ever closer to preaching communism as the months go by.

        Truss needs to hold her nerve and all the exaggerations will subside, and the economy continue to grow as it has done in the last quarter but at an increased rate

      2. a-tracy
        September 30, 2022

        Peter, they fielded Andrew Griffith MP the other night; I’ve not heard of him before, he came over very well, very calm and measured.

      3. hefner
        September 30, 2022

        Could it be the reason why the PM and Chancellor are this morning meeting people from the OBR?
        But I guess the Turnip Talibans will find another explanation despite the fact that ‘cerebral disputes about central bank interventions are not likely to distract voters for long if their monthly mortgage payments soar’ (J.Jolly, 29/09/‘22).

        1. a-tracy
          October 4, 2022

          hefner, guido fawkes did a post about the OBR the other day, very interesting. The organisation didn’t exist until 2010 when the Tories took power yet it is headed by Left of Centre friends of the Miliband.
          Former colleagues or proteges of Torsten Bell the useful government bashing Resolution Foundation liked so much by the Guardian. It must be great to have an effective opposition feeding information to the government, lots of it subsequently proven wrong.
          My question is why would Cameron and Osborne and subsequently Boris kowtow to this organisation unchallenged.

  2. Mark B
    September 30, 2022

    Good moring.

    Many thanks for the explanation, Sir John.

    What concerns me, as I mentioned yesterday, is that to the outsider it appears that no one seems to be talking to each other. Others pointed out that the various announcements could have been handled better, both in their timing and what was said.

    This has proved to be a gift from heaven for Labour and all manner of Left Wing outlets have naturally ceased upon this to punish the new government.

    The rather unnecessarily protracted Conservative Leadership campaign has, like so much else, come back to haunt you. Something I feel needs addressing.

    Although things are indeed a bit rough we are far from alone. But we really need to see some signs that the government is getting to grips with State spending.

    1. Dave Andrews
      September 30, 2022

      Interesting interview on GB News last night, with someone describing the bureaucratic waste taking place in the NHS. This would be a good place to start in getting to grips with State spending. Unfortunately government ministers don’t have the attention to tackle the challenge.

    2. a-tracy
      September 30, 2022

      MarkB, a couple of things made me wonder, Kwasi Kwarteng had to make his mini-budget statement in the HoP otherwise, the speaker goes bonkers.
      I wonder if the BoE were pre-notified of his mini-budget or not? Or would this be seen as giving the information to outside agencies before announcing his intentions to the House?
      The BoE wrote: The Government’s Energy Price Guarantee will reduce the near-term peak in inflation. Last Friday the Government announced its Growth Plan, on which the Chancellor has provided further detail in his statement today. I welcome the Government’s commitment to sustainable economic growth, and to the role of the Office for Budget Responsibility in its assessment of prospects for the economy and public finances.

      Do you think this was relayed calmly in the Press? Or is it more sensational to interview Carney and other global followers.

  3. Lifelogic
    September 30, 2022

    Indeed.

    It would be rather easier to have more confidence in the bank if Andrew Bailey had not headed up the FCA when it forced 39.9% personal overdraft rates onto the baks regardless of the borrowers credit risk. Anyone who does this has no real understanding of risk reward or how to run a bank. Meanwhile the same banks are nearly all paying 0.4% about 1/100 of this on instant deposits. So why is there no competition authorities investigation into these rip of margins and rates amd the clear lack of real competition? Why did the FCA push this economic lunacy? Interestingly Lloyds and HSBC only charge these rip of rates to UK borrowers and not overseas overdrafts at overseas branches.

    1. Lifelogic
      September 30, 2022

      Betting odds for next PM after general election suggests Starmer ~ 69% Truss ~ 29% Boris ~ 1% or Sunak ~ 1%. Perhaps it’s time to sell up all UK investments? A Starmer/Stugeon government would be a complete disaster. Even a Truss coalition with SNP/Libdims/Plaid…would be rather dire.

      1. Lifelogic
        September 30, 2022

        All four are still foolishly sticking to the bogus “net zero” expensive, unreliable energy by design religion. Come on Truss – at least put it on hold for 5 years, then another 5 and so on.

      2. Christine
        September 30, 2022

        Why do people turn from one failed party to another failed party? They don’t ever seem to learn this isn’t a solution. Labour would be a disaster.

      3. Bloke
        September 30, 2022

        Predicting 69% based on a rapid blip up to two years before what will happen suggests uncertainty.
        New events might soon enshadow those of the current few weeks.

        1. Lifelogic
          September 30, 2022

          Not “predicting” just saying what the odds imply.

        2. Lifelogic
          September 30, 2022

          I still think the Tories will win myself – after all who wants Sturgeon and Starmer? But it does not look too good. The blame for the market volatility lies mainly with the mess left by serial manifesto ratter Sunak and the dire Chancellors before him Hammond & Osborne. Osborne should have ditched 45% and 50% 12 years back and kept his IHT £1m promise.

          We have had dire tax borrow and piss down the drain, big state policies under Major, Blair, Brown, Cameron, May and Boris for 30+ years – so do not blame Truss and Kwasi for their three weeks finally moving in the right direction..

      4. None of the Above
        September 30, 2022

        Yes, good post. Somebody suggested that some of the panic was based on that estimate but I believe Sir john’s explanation more plausible. I never bought the idea that the markets were spooked by the tax cuts (as claimed in the lefty press), the cost of those cuts was a tiny fraction of the cost of the energy support package which was barely mentioned.
        I keep wondering what Eddie George would have done.
        Nostalgia is not what it used to be.

    2. Lifelogic
      September 30, 2022

      Which? wants probe into printer ink which can cost ‘seven times more than Dom Perignon champagne.

      The competition authorities should do this too while looking at the rip off 39% overdrafts. The printer people spend ~ 2p on the ink and £5 on electronics to prevent you using anyone else’s ink or refilling it – then sell it for £40 a pop. Very wasteful & very bad for the environment too.

    3. ukretired123
      September 30, 2022

      LL Bullseye Andrew Bailey FCA failed, promoted to BOE head, failed.
      Next job head of IMF?

    4. miami.mode
      September 30, 2022

      Apparently, LL, the late Queen appointed Andrew Bailey on the recommendation of the then Chancellor, Sajid Javid, so now that she has sadly gone perhaps his tenure should come to an end so that the new King can appoint somebody competent.

      1. Lifelogic
        September 30, 2022

        +1

      2. IanT
        September 30, 2022

        I think we might be stuck with him for another eight years! 🙁

    5. rose
      September 30, 2022

      LL, didn’t the sacked Tom Scholar make the choice of Bailey as Governor, it being Javid’s first day?

    6. a-tracy
      September 30, 2022

      LL – Andrew Bailey was chosen by a team headed up by Phillip Hammond, during Theresa May’s watch. “Philip Hammond has said he will cast a global net to seek out the BoE’s 121st governor, it will be Hammond who makes the key recommendation, based in part on advice from his officials.

      Some candidates might get special treatment, as Carney did. The top Treasury civil servant in 2012, Nick Macpherson, began making informal, private approaches to him and other potential candidates from February that year.

      Carney did not apply for the job by the official deadline, and only agreed to an interview after Osborne met him at a meeting of global finance officials in Mexico in November 2012. Osborne agreed that Carney could serve just five years of an eight-year term, among other things.”

  4. DOM
    September 30, 2022

    The BOE is acting politically. You know it, I know it, my little old granny knows it. Condemn it for acting outside its known areas of competence and generally accepted zones of interest.

    It is not for good ole ‘out to lunch’ Bailey to decide who the next PM should be. And please someone tell the Americans to stay out of our national life. You can see the damage that causes when they send Harris to Korea and Biden to Disneyland

    We’re being governed by charlatans and despots

    1. Sir Joe Soap
      September 30, 2022

      More like idiots than charlatans or despots.

    2. Donna
      September 30, 2022

      Absolutely. Mr Schwab must be very pleased with his little helper at the Old Lady.

      1. Mickey Taking
        September 30, 2022

        They have contacts at Juventus football club? ( la Vecchia Signora (Italian: “the Old Lady”).

  5. Lifelogic
    September 30, 2022

    David Frost from the Telegraph
    “Why Kwasi’s right and Carney’s wrong”

    Indeed but he is not going anything life far enough with cutting out the vast government waste, tax cutting & tax simplification, ditching net zero or starting the bonfire of red tape. Only perhaps 18 months to the next election.

    1. None of the Above
      September 30, 2022

      I have some sympathy with your post LL but I anticipate some interesting changes in November’s budget. Well, I’m allowed to speculate if everyone else is, aren’t I?

    2. Ed M
      September 30, 2022

      Do we want the UK economy being run as if the UK is the equivalent of a company such as Sports Direct or a more complicated and nuanced company such as Apple.

      Lifelogic’s policies work well if you’re running a company such as Sports Direct but not if you’re country is like or meant to be like Apple.

      1. Ed M
        September 30, 2022

        Also, Trump was like a leader running a company such as Sports Direct. His logic overly crude. But to create a sophisticated company such as Apple requites a lot more imagination, many more skills and a much more nuanced approached.

        Sports Direct is worth 3 billion
        Apple is worth 2 trillion.
        Sports Direct doesn’t have many highly skilled jobs. Apples has many, many, many.
        Sports Direct doesn’t have many high quality, high productive exports (if any). Apple has many.

        Do we want the UK economy to be like Sports Direct or Apple?

        (And nuanced, well-thought out responses welcome – not rude / aggressive ones).

        1. Mike Wilson
          October 1, 2022

          IF Apple’s products are made in China, is it a USA exporter?

          1. Ed M
            October 1, 2022

            Ha, ha!

            – You’re right. My theory not so sound …

            But anyway, I’m sure most of Apple’s R&D and important brand development stuff is done back in USA. In other words, all the highest skilled jobs (and Apple still a big employer in USA in general).

  6. Lifelogic
    September 30, 2022

    Betting odds on Tory overall majority at the next election now even worse at 17/4 implying only a 19% chance. An 81% chance of Labour or some dire Coalition (almost certainly including the SNP having serious power over the UK). What sensible English voter would ever want that? Look like goods odds for a wager to me but then are Truss’s many enemies really going to explode the party with their sore losers bile assisted by the dire BBC.

    1. Christine
      September 30, 2022

      Yes, they are. Look at the damage they inflicted over Brexit. Unless Truss deals with the traitors within her own party she has no chance. Labour just has to sit and wait as the Conservative implode.

    2. Mickey Taking
      September 30, 2022

      It is not a question of ‘who would ever want that?’ – if the public continue to think we now have a 4th Tory government that doesn’t do what it said it would, and is generally considered a disaster, then they will decide a change is required. It is a matter of how strong that discontent shows in the polling and the control outcome.

  7. Sir Joe Soap
    September 30, 2022

    It sounds like a mess, even from somebody who wants to calm the waters.
    “Many pension funds have geared positions in gilts,” stated as though this was nothing out of the ordinary. Why on earth do pension funds need to bet on the horses? Build enough in equities to live off the yields. If DB pensions are a step too far, cut their returns. As for taxpayers’ money to bail them out, get lost!

    1. Lifelogic
      September 30, 2022

      The real problem with pensions is the vastly over generous state pensions. Paid for by people working in the private sector & paying high taxes/NI – who often have almost no private pension at all.

    2. miami.mode
      September 30, 2022

      Get lost is appropriate but it has already been stated that the purchase and subsequent sale of bonds to bail out the pension companies will probably result in a loss which will have to be covered by the taxpayer – the payer of “every” last resort.

    3. Peter Wood
      September 30, 2022

      Quite so, I was equally surprised to hear that pension funds are taking these kind of risks. One would think that they’d keep a very low risk strategy. I read today that they had been warned 5 years ago!
      We’re seeing problems now because we’ve had 20 years of near zero cost of borrowing; that is all changing and there’s a major ‘reset’ going on. Some are better prepared than others.
      I think the Fed. is handling it much better; announcing, in no uncertain terms, that the cost of borrowing is going up and there’s going to be less liquidity to go around, so GET USED TO IT. Crypto fans be warned….

      P.S. To answer my own question, since Sir J, doesn’t wish to, of course it’s Government Policy, because the BoE insisted on a ‘make good’ promise if they have to take a loss on the Gilts purchased. So to quote our host ”We Don’t Believe You”.

    4. MWB
      September 30, 2022

      Joe Soap
      The state deliberately trashed private worker pension funds many years ago, so the state should now compensate them, fully.
      I presume you are one of our wonderful public workers.

      1. Mickey Taking
        October 1, 2022

        by reducing the independence of people paid pensions they earnt, and thereby forcing more to switch to benefits, in the longterm you are likely to get more voters grateful for the crumbs dropped.

  8. Mike Wilson
    September 30, 2022

    Many pension funds have geared positions in gilts

    That’s a chilling sentence. Why on earth is this allowed?

    1. Mitchel
      October 1, 2022

      It shouldn’t be but they are desperate to enhance returns (and performance fees).Lessons do not get learned because of self-interest.

      Gilts can/will never be repaid so I would ban pension funds from holding them.Full stop.

  9. Mike Wilson
    September 30, 2022

    When this (latest) inflation kicked off, the consensus was that the cause was the large increase in energy (gas, electricity and fuel) prices. How is raising interest rates supposed to help curb inflation?

    When inflation is caused by too much demand, one can see how raising interest rates – to make credit more expensive – makes sense.

    But when demand falls because consumer spending tails off because everyone is spending £20 to £50 more a week on energy and petrol – how on earth does raising interest rates do anything other than cause a recession?

  10. NBill Brown
    September 30, 2022

    Sir JR

    Interesting perspective but most likely wrong, it had everything to do with the financial statement and the subsequent necessity to buy bonds . (Source FT 28 September)

    1. Peter2
      October 1, 2022

      Any facts to support that claim billy?
      Prove “everything”
      100%
      No other factors.
      None at all.

      1. NBill Brown
        October 1, 2022

        Yes quite including the statement from the deputy director from the BoE and market makers in the City like the trading desk for bonds at Lloyds Bank. But you probably missed that as well

        1. Peter2
          October 1, 2022

          And many others who think other factors are in play.
          You probabky missed that as well.

          1. NBill Brown
            October 1, 2022

            You asked for a source and got three

          2. Peter2
            October 2, 2022

            Why have other countries currencies fallen against the strong with no mini budget Billy?
            Euro down too.

          3. Peter2
            October 2, 2022

            No other factors involved is what you claimed Billy.
            Your 3 sources do not prove that.

          4. NBill Brown
            October 2, 2022

            And you qouted as usual with no source or homework

          5. hefner
            October 2, 2022

            Buona sera P2, your faithful troll here. Have you ever thought of applying for the position of SoS for Environment? In the way you move the goalposts (ie, a beautiful catch of red herrings) in what you think is a ‘decent debate’ you might be as good as Owen Paterson. Ciao.

          6. Peter2
            October 2, 2022

            Because I’m asking a question after you made a claim that only the budget affected markets nothing else.
            Do you understand how things work?

  11. Sea_Warrior
    September 30, 2022

    Very informative, Sir John – but would I be right in thinking that there was NO coordination between what the BoE and Treasury were doing last week? The government needs to commission an INTERNAL inquiry as to the events and effects of the past few days. Meanwhile, I’m sticking with my view that the man complicit in delivering the current energy crisis in this country shouldn’t have been rewarded with a promotion.

    1. hefner
      October 2, 2022

      An interesting item in the 01/10 edition of The Times by Tim Shipman ‘Liz Truss was told: Don’t do this. Her attitude was: I don’t care’.
      Obviously that’s a bitty different from the narrative that Sir John has been trying to ‘sell us’ these last few days, but not everybody can be a distinguished historian.

  12. Cuibono
    September 30, 2022

    “Lower for Longer” has been the magical mantra from the IMF for ( some time?).
    I remember reading that the IMF wanted/decreed a good decade of low rates. Which I think allowed the rich to amass assets?
    What about those who have paid into the rotten system all their lives on pain of imprisonment ( which happened anyway!)?
    They were taught to save and expect an interest rate in return.
    Triple Lock under threat now?

  13. Richard1
    September 30, 2022

    Leverage in final salary pension schemes has bubbled up as another massive regulatory balls-up it seems. The Bank of England and the FCA seem to have ignored this. We need to find out more about it.

    Meanwhile is there anything you can do to assist Liz truss in communication skills? She is really very weak. No wonder most of her colleagues, who presumably knew this, backed Rishi Sunak. Obviously what is going to matter by the election is whether these policies work, but subject to hostile or even neutral questioning she sounds worryingly clueless. Did you take a view on this issue when backing her for the leadership?

  14. Nigl
    September 30, 2022

    The strength of the dollar is conveniently overlooked as is the mortgage rate in the US which is the highest in 15 years. Equally the turmoil being caused/expected in Europe.

    Sensational trouble causing headlines from the press and the Liberal elite/remain contingent doing everything they can to thwart the threats to their social democrat/left wing utopia. Not helped by the useful idiots amongst wet Tory MPs and ex MPs more interested in their own views/ scores/whingeing etc than making the necessary changes to get this country going again. Nick Boles, Ken Clarke massive chips on their shoulders.

    I see it emerged today criticism of both Carney and Bailey not looking into LDIs a very complicated financial instrument used by the pension industry and a root cause of the recent volatility. How convenient but no surprise if true both incompetent, with the latter being rewarded for failure by your government, a metaphor for the wider Civil Service/public sector.

    And in other news it is alleged Truss will squeeze benefits to help balance the books. Almost at the same time as giving the rich a tax cut. Politically are she and her advisers completely mad?

  15. Javelin
    September 30, 2022

    John,

    Could you please comment on the crisis surrounding Liability Driven Investments in Pensions. Specifically (1) these were final salary pensions (2) these are mainly held by civil servants, politicians and senior corporate managers (3) whether these pensions are still affordable and (4) if not what should the Government do if they are not affordable.

  16. Stred
    September 30, 2022

    Following the destruction of the Baltic gas pipelines and the ending of a possible peace agreement, it is likely that shortages of gas will force prices even higher. The US producers have said that they will not be able to supply the shortfall of Siberian gas and LNG from distant counties will continue to be expensive. The UK will now have to share North Sea Norwegian production with Europe following the completion of the Denmark to Poland pipeline, which coincided with the attack on the Russian ones. The consequent increase in electricity price will also force inflation in industrial and food production and the lack of fertilizers will also cause shortages.

    All told the British economy has been dealt a severe blow by whoever caused the war in Europe and destroyed any resumption of low cost energy.

    1. Stred
      September 30, 2022

      And anyone who thinks the Russians blew up their own expensive supply lines must be suffering from watching too much BBC propaganda. The satellite data on positions of ships in the area will soon point the finger towards those responsible for this ill judged act.

      1. Mitchel
        October 1, 2022

        Absolutely,particularly as there were large pro-Nordstream demonstrations in Germany recently.Interesting that the German Bundestag voted against further arming Ukraine yesterday.They know who dunnit!

    2. Donna
      October 1, 2022

      I wouldn’t lay money on the Denmark to Poland pipeline surviving too long.

  17. Nigl
    September 30, 2022

    Frostie in the DT this morning, spot on, why is not at the heart of Truss’ operation instead of more ‘children’ as with Boris?

    No one with a scintilla of political nous would have made the lop sided Big Bang announcements that Karteng did.

  18. J M
    September 30, 2022

    You make the point that pension funds were engaged in contracts for differences and it was the margin calls threatening the stability of the pension industry, which forced the Bank to act. An interesting and pertinent question is what were the pension funds doing engaging in such risk operations? They too, it would appear, were betting on market movements, but they called it wrong.

  19. Berkshire Alan.
    September 30, 2022

    All looks like a giant creative accounting mess to me.

    Pray tell me are any government, local authority, NHS accounts ever properly audited, and if so by whom.

    1. Mickey Taking
      September 30, 2022

      Our Nation’s financial control and guidance for growth and stability appear to be a bouncing ball, one second its up and then its down.

      1. Mickey Taking
        September 30, 2022

        why not publish?

    2. Bob Dixon
      September 30, 2022

      The National Audit Office

  20. formula57
    September 30, 2022

    Given “It should be clear to anyone the extreme volatility on Wednesday was about the Bank’s interest rate policy, not a delayed response to the Financial statement”, why the emergency meeting with the discredited and dangerously wrong OBR?

    And talking of inappropriate meetings, why is someone off the the inaugural meeting of Macron’s European Political Community? Is the view of the British people in the 2016 referendum to be trashed so soon?

    1. None of the Above
      September 30, 2022

      Yes, I found that significant too but probably not for the same reasons.
      The Treasury Sub Committee (or whatever it’s called) demanded to see a forecast before the end of October. Knowing how inaccurate the OBR forecasts have been recently, I suspect Kwasi needed to hot-foot it down there to tell them what was in the plan to encourage the OBR to use a sensible model.

      1. Mickey Taking
        September 30, 2022

        usually a sub-Committee is required to tell the fools at the top what to do, they wouldn’t have a clue.

    2. Shirley M
      September 30, 2022

      + many. So many of our politicians appear to think that democracy (and the electorate) is to be avoided/ignored/deceived rather than respected. Some even go so far as to deliberately damage the UK and democracy.

    3. Denis Cooper
      September 30, 2022

      Funny you should mention that, as this has just come through:

      https://www.cer.eu/publications/archive/bulletin-article/2022/can-truss-reset-relations-eu

      “One opportunity for Truss to start building bridges would be to attend the inaugural meeting of the European Political Community (EPC) in Prague on October 6th … But what really matters for a potential reset is the protocol. If Truss pushes ahead with the Northern Ireland Protocol Bill, which would allow the government to overturn parts of the protocol, no reset will be possible and bad relations with the EU would be guaranteed. If the bill enters into force – even without the government activating its clauses – the EU would respond to Britain’s disregard for international law by starting some sort of trade war.”

      When people like Charles Grant talk about a “reset” of UK-EU relations what they really mean is a “reset” of UK policy vis-a-vis the EU, aka “surrender”, because as he admits “The EU’s basic position is that it will not change the wording of the document that Johnson’s government negotiated.”

      Therefore optimism about fresh negotiations most likely means the UK government is willing to surrender:

      http://johnredwoodsdiary.com/2022/09/29/bonds-and-mortgages/#comment-1344310

      “Guess which side will back down”

    4. Diane
      September 30, 2022

      Formula 57: Political community or Political forum … ? Look at the headline too from the Daily T – ” Liz Truss will fly to Prague to join new European political community” Some might interpret that as her going there to sign us up ! I assume at present it’s just an initial talking shop but it seems that there is a keenness as migration & energy are on the agenda. Hopefully she’ll listen hard, have a list of questions & not have her cheque book with her. I jest but will await further reports with great interest.

    5. Mike Wilson
      September 30, 2022

      Is the view of the British people in the 2016 referendum to be trashed so soon?

      It was trashed the day after the referendum. Years to issue Article 50, years to negotiate a crappy deal. None of them thought they’d lose the referendum and none of them believe in Brexit. Not May or Johnson – none of them.

      1. Mickey Taking
        September 30, 2022

        I thought when Cameron was sent home like a naughty schoolboy whining at teacher, the result would be LEAVE.

      2. Peter
        September 30, 2022

        MW,
        Correct.
        None of them care about the country either. Blair-style self-advancement is what drives them.

      3. Mark B
        October 1, 2022

        The look on Johnson’s and Gove’s faces the day after the Glorious Referendum said it all – They looked gutted !

        You are right, None of them wanted to Leave.

  21. Dave Andrews
    September 30, 2022

    Let me get this right. The BoE has bought government gilts in the past. Now that interest rates have been raised, those gilts with low interest rates attached to them are worth much less, so they try to sell them.
    In other words BoE policy is to buy high and sell low, which is the opposite of sensible business policy.

    1. Berkshire Alan
      September 30, 2022

      Dave
      Indeed who in their right mind would buy a 1% 30 year bond at any time, let alone when interest rates are rising, and have not yet reached even the average interest rate over the last 50 years.

    2. miami.mode
      September 30, 2022

      Don’t fret, Dave, the government are giving you £400 off of your electricity bill to assist you with the money you will have to give to the BoE for their losses – oh hang on, you’ll also have to cover the £400 with future taxes.

      Oh to have a job where the cost of every mistake is paid by someone else.

      1. Mickey Taking
        September 30, 2022

        or a job where you are paid rather well, whatever the size and scope of the balls up!

    3. rose
      September 30, 2022

      This is Gordon Brown’s Bank of England, Dave.

  22. Mike
    September 30, 2022

    Where are the great Tory knowall’s when you might have need of them – you know the one’s we’ve been used to seeing over the years on our TV screens – gone to ground it seems – even IDS and the great Gove etc – all gone – but maybe they might turn up at the conference and spare us a few words.

  23. turboterrier
    September 30, 2022

    What seems totally crazy is the real world when companies, industry or domestic homes get into financial difficulties the first thing is for the bank to demand that all areas of waste real and manufactured are dealt with.
    Surely an independent bank can demand that real changes are implemented before the bail out talks commence?
    What we are experiencing is that the vast majority of politicians are totally unfit for the position they hold.
    Until we get a totally different breed of candidates selected for possible election they nothing is going to change at all, it will only get worse.

    1. IanT
      September 30, 2022

      We get what we vote for TT – and of course the candidates the parties present as being “suitable” ( competence not always seemingly part of the qualification).

      I’m fortunate because we have Sir John as our MP whose views I generally approve of (I’m sure he will be relieved to hear that 🙂 ) The problem is that sometimes (quite often?) I get a PM along with Sir J that I’m not so happy with. So, whilst I think Ms Truss may not be a great PR person (or public speaker) I will admit that I’m willing to give her (and Kwasi) a chance – because I’d given up on the crowd pleasing Boris Johnson ever giving us any kind of sensible policies. We are not off to a good start – but if some of the idiot Conservative MPs can actually realise they have very little choice but to support her – then we actually get somewhere.
      But someone please find a way to lose Andrew Bailey (maybe the IMF or WHO have a vacancy?)

    2. Mark B
      October 1, 2022

      . . . all areas of waste real and manufactured are dealt with.

      Which what I have been banging on about. There are areas of spending where we could make real cuts and not affect public services AND use the savings to reduce taxes.

  24. Mark J
    September 30, 2022

    I seriously wish this Government would sort itself out – by listening to the people who voted for it and those people who have knowledge in how to deal with various issues.

    Tax cuts for the rich are not unacceptable, however the timing is utterly appalling. The time and place for such a move is when the economy is in a far better place.

    Why does has this Government also let the energy companies off the hook for sky high prices. They should be forced to lower the unit costs off their own backs, or face a financial penalty. I’m not generally in favour of penalising business for success, however the energy companies are very much an exception with their blatant profiteering in a crisis.

    Liz also needs to grasp we need LESS immigration, not more. With five million economically inactive people already in this country, your vacancy shortages pool is already here – we don’t need any more!

    At it currently stands were are sleepwalking towards an undeserved Labour win in the next election. Not through how good Labour supposedly are, but through how poor the Conservatives have become.

  25. The Prangwizard
    September 30, 2022

    I don’t suppose most on here ought to be surprised but the attacks on PM and Chancellor from the establishment, and broadcast media has been outrageous and unforgiveable. They seem so confident in being able to bring them both down that they are no longer hiding their political bias.

    I hope both these leaders who are attempting a break away from the old depressing and failing ways will be act strongly and determined and not be weakened.

  26. acorn
    September 30, 2022

    I would like the BoE to tell me how it calculates an interest rate that can reduce imported energy based inflation. Raising interest rates to create unemployment; to reduce spending power; to reduce inflation; is a feudal way of controlling the peasants, that belongs in the Middle Ages, where the BoE still is along with Kwasi economics!

    Money is not tight. M1 is currently £2.5 trillion (basically monthly shopping money). M2 is £3.1 trillion (big price ticket purchases). It is being hoarded not spent. M2 velocity of circulation is down to 0.73. That is a Pound is being spent once every 16 months. Hence, GDP at £2.3 trillion is flatlining.
    https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/pn2

    I have probably board you with this before but, I still say global capitalism has never recovered from the 2008 crash. The history of US M2V is the chart that shows it. The deregulation of the western banking sector, led to amalgamations and the too-big-to-fail concept. Except, these huge organisations were so umbilically linked such when one failed they all failed, domino style.
    https://fred.stlouisfed.org/series/M2V

  27. anon
    September 30, 2022

    “Many pension funds have geared positions in gilts, and were finding it difficult to raise money to pay the extra calls on their geared derivatives.”

    Who could have known? Which regulator is responsible for ensuring speculators can absorb any potential losses without needing to be bailed out? Why the bailout?

    Maybe these pension funds need to be closed to new entrants and wound down.

    Decades long NIRP caused this mis-allocation. The BOE should set out its plan to raise interest rates slowly to return inflation to zero.

    A market is not market if it is not allowed to clear.

    Maybe our pension saving market is just a pool of savings to be abused by those with power and information, including government.

    1. anon
      September 30, 2022

      Or is the message over-leverage and we bail you out? Act prudently and we will tax & inflate you away. How do you choose who to bail out and not? It seems we don’t have well regulated markets, we don’t have fair competition and faithful democratic government. (examples Immigration,NIP,foreign aid,net zero).

      All ran by the conservative control party or its masters.

  28. Original Richard
    September 30, 2022

    We’re in a financial mess because of the anti-science and purely political actions of fifth column communists and globalists in our institutions who brought about excessive lockdowns and the economy destroying CAGW/Net Zero scams.

    Russia would not have invaded Ukraine if CAGW/Net Zero had not made Europe so dependent upon Russia’s oil and gas and funded the invasion.

    There is no CAGW. CO2 has steadily declined for the last 150 million years – locked up in carbonaceous rocks – to a level just 30 ppm above the level below which plants cannot survive. We need more CO2 in the atmosphere, not less, to green the planet and grow more food. Temperature does not follow CO2 concentration, in fact at low temperatures and CO2 levels the evidence is that CO2 follows temperature (Antarctic Vostok Ice Core Data).

  29. glen cullen
    September 30, 2022

    I was happy to support Lizz, and welcomed her tax cutting initiatives to date, however all that is meaningless now that she’s going to attend the European Political Community (EPC) summit – what part of the referendum to leave the EU and all its institutions didn’t she understand

    1. IanT
      September 30, 2022

      Well, just because we left the EU Glen, doesn’t mean that we can’t work with them. We should at least understand what they are up to. We are just a few weeks now under New Management – let’s give them a chance to get settled in and see what they actually do (rather than say)
      We are about to go through some tough times and rather than blame Liz & Kwasi for the problems (which pre-date them by a long time) let’s hope that they see what’s coming (and I’m sure they do) and are working to take the sting out of some of it….

  30. Derek Henry
    September 30, 2022

    Morning John,

    But there are still a couple of problems here if Brexit means being independent.

    1. Bloomberg has let the cat out of the bag

    “Even if some smart bankers in Threadneedle Street have saved us all from a crisis, broader confidence in the UK economy is barely affected. That’s because the problem lies in fiscal policy, and therefore requires a political solution.”

    Monetary policy is supposed to magically sort out Aggregate Demand via the infinite power of expectations. Yet nobody, and I mean nobody can describe how that process works, apart from to create unemployment to lower inflation.

    What we see here is the actual mechanism. Moving interest rates up and down is largely performance art. Government is supposed to respond to that by tightening or loosening fiscal policy. And that’s actually how the steering is connected to the wheels.

    The corollary of an independent central bank is an independent Treasury, but apparently if the Treasury does their own thing that’s “fiscal dominance” and not allowed. Hence all the silly focus on fiscal rules and the like.

    So after arguing against deficit spending for decades asserting that with high debt/gdp interest payments these interest payments will cause inflation if taxes aren’t increased.

    They are now claiming rate hikes will lower inflation with a high debt/gdp even as they add to deficit spending.

    It is just like being tied to the EU stability and growth pact fiscal rules and having no independence at all.

    2. What is true with high enough debt/gdp rate hikes are fundamentally inflationary.

    For an extreme to make the point, if, given today’s gdp, public debt was 10x higher or the policy rate was 10x higher and interest payments were £100 billion vs £30 billion today, those people saying those ‘extra’ interest payments of £70 billion would have no effect on aggregate demand or fx diversification. Really don’t know what they are talking about.

    As you know John government borrowing is just a reserve drain. So the BOE can hit its overnight interest rate target.

    So they need to learn that they that they don’t issue bonds at all, only currency, but to placate those that clutch at their pearls at such a thought. Selling 3mth bills as a mechanism to carry out the reserve drain does the same job.

    Every mainstream text warns above some debt/gdp rate hikes add to demand/gdp/inflation if taxes aren’t raised.

    If they don’t get that then they will start to make inflation worse. Need to start cutting interest rates again. Or hold for longer and stop hiking. Or issue short term instruments to carry out the reserve drain.

    A much better option would have been targeted government spending to fix the supply side and bottle necks to ease the inflationary pressures. Not only would it have created jobs it would have pushed inflationary pressures way out to the future. Our infrastructure structure needs a very serious upgrade.

    Instead of the carpet bombing approach of rate hikes that doesn’t even reduce loan growth but just creates unemployment instead. Rate hikes don’t make lorries, trains and boats move faster. Rate hikes just takes them off the road, rail and sea by slashing demand. The problem will still be there in the future.

    Does this govt see that some serious infrastructure spending is the low hanging fruit to get some productivity gains.

    A complete overhaul of our infrastructure is so desperately needed John.

  31. Denis Cooper
    September 30, 2022

    The stupidity of all this is quite appalling, and it could almost make me think that we would be better off being ruled by Brussels bureaucrats … not really. This is from July:

    http://johnredwoodsdiary.com/2022/07/16/the-debate-last-night/#comment-1329606

    “It concerns me that Liz Truss keeps going on about the UK having had “low growth for decades.””

    “So it is simply not true that we have had “low growth for decades”; we have had irregular growth but over more than seven past decades, basically since the Second World War, we have had growth averaging 2.5% a year, and I do not expect that Liz Truss or any other Prime Minister will be able to permanently accelerate it.”

    I didn’t have a vote in the Tory leadership election but my first preference was Suella Braverman, and then out of the final two I preferred Liz Truss for just one reason, which was that she seemed the more likely of the two to follow through on the necessary unilateral disapplication of the obnoxious Northern Ireland protocol that Boris Johnson gave the EU in exchange for his pathetic little trade deal, and now she’s backing away from that.

  32. Michelle
    September 30, 2022

    I watched a clip of Farage this morning talking about the economic doom scenario.
    Interestingly he said the furore is around the tax cuts, because the globalists do not like this they want more control of our money. Secondly the cost of the energy crisis and its bailing out will cost 3 times more than the tax cuts, and yet no one wants to talk about that.
    He summed up with the financial mess being down to the net zero lunacy all the while we could provide ourselves with cheaper home produced energy. A nod to Starmer about his wind revolution and how that’s all well and good while the wind blows Mr Starmer .

    Is this a fair assumption? Have the usual suspects picked up on the tax cuts for wealthier people as the end of our civilisation, while failing to mention a much larger amount of money being thrown at windmills which may or may not keep your lights on.

    1. Grady
      September 30, 2022

      Michelle … The globalist cannot take control of our money because we have ‘taken back control’ – I think

    2. IanT
      September 30, 2022

      The Bankers Bonus cost us (taxpayers) nothing, in fact it might even increase the tax take. The 45% is about £2B in theory but could be less in practice. Compared to fixing energy costs for 18 months – it is small change.

      But they got rid of Boris and now they think they can get rid of Liz even faster. Beth Rigby’s excitment at that thought is palpable. Really just depends on how stupid some Tory MPs are.
      (Just typed that and immediately thought “and that’s pretty stupid” )

      1. Mickey Taking
        October 1, 2022

        well the £millionaires paid can treat themselves to a new Tesla on the reduction to 40%.
        On the average salary/wage however the new 19% not 20% will reduce tax by about £500, enough to pay 2 months heating for most.

        1. IanT
          October 1, 2022

          I have never and will never, earn that much MY – but the fact is that the top 1% already pay about 30% of all income tax, with the top half of tax payers paying 80% of income tax. So let’s get off this “it’s unfair” nonsense. Someone who gets a £100K bonus immediately coughs up £40k in income tax then probably goes on to pay another 20% in VAT when they spend the remainder. Better to have a bonus paid here in UK, than for them to get paid it in New York – or in the form of (much harder to tax) ‘benefits’.

          The big handout is that everyone (including me and you) is getting is having their energy bills capped – so let’s stop the “it only benefits the rich” crap and be grateful for that.

  33. outsider
    September 30, 2022

    Dear Sir John:
    I do not envy the Chancellor his task. How to break out of the morass of distortions? The trade deficit and the budget deficit are both about 7 per cent of GDP; inflation is high, only partly because of an external shock that requires help for families and small firms; many businesses have already been lost due to lockdown; interest rates have been historically low and mostly negative in real terms for 14 years yet investment has been poor; growth has been sporadic, uncertain and largely dependant on mass immigration.
    The break-out cannot be done without some pain somewhere in the system. Do we go yet again for devaluation and more cheap labour when employment is already high? Please not.
    Encouraging risk-taking investment must be right, but not in sectors that require cheap labour . If the break-out is not to be inflationary, it must be controlled by monetary policy, however contradictory that might seem.
    The Bank has indeed got its tactics 100 per cent wrong. Selling gilts seems to have been a soft option alternative to a steeper rise in Bank Rate, making long-term rates nearly double the short-term rate. It needs to be almost the other way round . The point of much higher Bank Rate is not to choke off credit but to strengthen the exchange rate, even if that cannot be said in public. That will directly cut inflation, keeping long-term borrowing costs down and giving a breathing space to get the flywheel moving. It will even ease the pain on mortgages.

  34. Mike Wilson
    September 30, 2022

    Own up! Who amongst you voted for Truss?

    1. Mickey Taking
      September 30, 2022

      I didn’t qualify for a vote – — ha ha.
      But Mordaunt or Truss seemed the only possible ones worth voting for.

  35. Caterpillar
    September 30, 2022

    I think there is a problem of lack of transparent explanation. I assume KK and LT believe (know) there are three problems to UK supply side growth (per capita) i.e. (i) specifics that restrict investment, (ii) malinvestment due to 15+ years of inappropriate monetary policy and (iii) suboptimal migration policy. I also assume they believe (know) that UK medium to long term growth is negatively correlated to primary deficit and to debt to GDP ratio, though weakly so. If this is the case (or whatever is the case) they should explain it very clearly.

    There will be plenty of economist and across party politician dissenters who are invested in and responsible for the status quo. (My biased view is that these dissenters are the cause of the UK productivity mystery.) Of course many voters and businesses are likely to respond at the micro (e.g. as assets are revalued) not macro level, but if tough decisions are being made they need to be clear. (My perception is that this is in contrast to Mr Sunak who wished to continue with the soft-no-change policies but described it as tough honesty). Sadly, I think clarity is an admission of cross-party and cross-institution failure, and as such is beyond the capability of the HoC and BoE.

    Alongside transparent explanation, in fixing (normalising) the economy KK and LT need to have their ducks lined up. For example BoE’s target needs to be clear (perhaps less than 2% inflation with no medium term, sustainable growth, green or other addons), foresight of what rocks will appear and how to cope (house prices need to drop 1/3 to be at 2009 low in real terms, 10Y and 30Y rates are likely to be over 4% unless inflation target is taken to 0% etc. We’ve seen the surprise and BoE response to the latter) etc.

    BTW: I don’t buy the requirement for an operationally independent central bank, it seems the country is at the whim of potentially biased, unelected committees being the tail wagging the dog.

    Aside: the energy cap is poorly designed.

  36. Lindsay McDougall
    September 30, 2022

    Let’s not be too subtle about this. The Government is being blamed for the disastrous effect of the Bank of England’s erratic monetary policy. The turmoil is manifesting itself in the house purchasing and mortage markets. A lady on Question Time has had an offer of a 4.5% interest mortgage cancelled and an offer of 10.5% substituted.

    The time has come to end the Independence of the Bank, at least temporarily, and for the Government to manage base rate so as to give some certainty to mortgagees. I suggest that base rate be raised 0.25% in each of the next six months, pre-announced. Yes, we need to eliminate inflation but it doesn’t have to be done overnight. And the current Governor of the Bank has to go; he has been a failure when there was no need to be. If it turns out that Governor has been manipulated by Rishi Sunak, that should be made public.

  37. Wiiliam Long
    September 30, 2022

    Unfortunately the BBC in particular, but in this case most other commentators, do not seem to know the difference between the Treasury and the Bank of England, but you would have thought there was scope for better liaison between the Chancellor and the Governor, unless of course the latter was playing a nasty game.

    1. Mickey Taking
      September 30, 2022

      So, ask Joe Public – they won’t know either – why should they?

    2. Mark B
      October 1, 2022

      +1

  38. Graham
    September 30, 2022

    Has anyone any idea why Truss is attending the EPC (European political Community) meeting next week? I thought that we had left the EU and now it looks like she wants back in again?

    1. Mickey Taking
      September 30, 2022

      why would we be interested in joining EU Division 2?

    2. Diane
      October 1, 2022

      Graham : I already posted above as I had read that it seems migration and energy are to be on the agenda. There has been too a suggestion that it be called E P F ( Forum ) rather than E P C. No idea if money will be involved ! Hopefully we will have more info at the end of the first week this month.

  39. Peter2
    September 30, 2022

    Pound now up to 1.12 against the US Dollar.
    Where are all the doomsters who were telling me it would go below parity just a few days ago.

    1. Peter2
      September 30, 2022

      Measured at 4pm Friday 30th

    2. NBill Brown
      September 30, 2022

      Peter 2

      This is not about one week or one month, the trend of the pound sterling value yo major currencies is unfortunately down. So do your homework before writing as we have tried to tell you for a very long time

      But to no avail

      1. Peter2
        September 30, 2022

        So go off and look at the last 5 years billy.
        Euro down more in percentage terms than the Pound.
        And other major currencies like Yen Australian Dollar Canadian Dollar also recently down against the strong American Dollar.
        Yes do your homework billy.

        1. NBill Brown
          October 1, 2022

          We are talking 10 and 20 years but I suppose that is a bit of a stretch for you?

          1. Peter2
            October 2, 2022

            Who is we?
            And who is talking about 10 or 20 years?
            Very odd.

        2. NBill Brown
          October 1, 2022

          You obviously have to do your homework on the EURO, but you seem to think it never applies to you

          1. Peter2
            October 2, 2022

            Strange post from you Billy.
            Very odd.

      2. mancunius
        September 30, 2022

        The euro is down against the dollar by 20.139% since May 2021.
        The euro is down against the dollar by 38.4165% since September 2008 – a fourteen year period.

        1. hefner
          October 1, 2022

          In January 2008 the £ was 2$ , it is now around 1.10-1.12. That looks like a 44% drop
          In September 2008, the £ was 1.8$. So a 36.5% drop.
          (freecurrencyrajtes.com).
          Please mancunius, don’t be as daft as P2 who does not know how to check currency pair fluctuations. Only one sad clown on this blog is enough.

          1. Peter2
            October 1, 2022

            My troll heffy speaks.
            PS
            You claim its only the pound that declines against the strong dollar yet you own figures prove I’m right
            Hilarious

          2. mancunius
            October 2, 2022

            My figures for the EUR/USD pair are transparently 100% accurate – check the charts for yourself. The downwards trajectory of the euro is marked and consistent since 2008, and the fall shows no sign of being halted.
            As we all know, a great deal of the recent fall is down to the US Central Bank’s recent obsession with the mighty dollar.
            Btw, are you an only child? Just idly wondering.

          3. hefner
            October 2, 2022

            The downwards trajectory of £ vs $ has been going on now for more than a century. So what’s your point?
            And your comparison starting from 09/2008 is questionable (to say the least) as all currencies were in turmoil in the following months/years.

            ‘Are you an only child?’ A strange question mancunius, no I have/had two sisters and a brother. What’s that got to do with pair of currencies fluctuations?

        2. NBill Brown
          October 1, 2022

          And how much is the pound sterling down more than 40 PCT

          1. Peter2
            October 1, 2022

            And how much is your Euro down Billy?

    3. IanT
      September 30, 2022

      Well it might still do so Peter but not because of Mr Kwarteng – but Mr Powell

  40. glen cullen
    September 30, 2022

    The data below is for the 24-hour period 00:00 to 23:59 29 September 2022.
    Number of migrants detected in small boats: 499
    Number of boats detected: 10

    Just another 499 beds to find

    1. Mickey Taking
      September 30, 2022

      rooms! – they won’t be 3 x bunk beds per room!

  41. The Prangwizard
    September 30, 2022

    The way certain elements of the broadcast media are reporting one would assume that the government is responsible to the OBR for its decisions on the economy and the budget and must get their approval. This is a disgrace and must be challenged. I am watching Sky News just now and it is clear to me that is what they think. This is another example of where the media must be disciplined. Tolerance is often taken advantage of and this is another case.

  42. acorn
    September 30, 2022

    I would like you all to join my household in a celebration. My default energy supplier, has finally managed to get my smart gas and electric meters, installed in January 2019, to do what they were supposed to do. They are still working on getting my smart gas meter to log half hourly consumption; a requirement for “Time-of-Day charges” that will soon be introduced. As the adverts used to say a couple of decades back; “keep going well, keep going Shell”. 😉

  43. Amelia
    September 30, 2022

    Cover up!

  44. mancunius
    September 30, 2022

    I am not subject to the 45% income tax rate, but anyone can see its unforseen effects are grossly unfair to earners in that particular band, and its removal was overdue. Several Tory MPs threatening to vote against the mini-budget have given the game away by claiming that Truss has only minority support among Tory MPs, and they had supported preferred Sunak. They are now determined to defeat the government – and then defeat Brexit, by allowing Starmer a free run. They should lose the whip now, and either cross the floor, or be de-selected, or resign their seats.

    1. mancunius
      October 2, 2022

      Apologies for typo: recte– ‘they had supported *and* preferred Sunak’.

  45. NBill Brown
    October 1, 2022

    Yes quite including the statement from the deputy director from the BoE and market makers in the City like the trading desk for bonds at Lloyds Bank. But you probably missed that as well

    1. Peter2
      October 1, 2022

      Well that’s three
      There are many others with different opinions billy
      But you and I know your real motivations.

      1. NBill Brown
        October 2, 2022

        Peter 2

        No source

        1. Peter2
          October 2, 2022

          You quoted two people billy who hold the same opinions as you.
          That’s fine
          There are others who hold different opinions.
          Why did other currencies recently also fall against a strong dollar.
          Like the Euro for example.

Comments are closed.