Bond yields and mortgage rates

In July 2022 the UK ten year interest rate was 2%. In early September it was 3% and by the time of the Kwarteng budget on 23rd September it was approaching 4%. It peaked on 9th October at 4.38%. In July 2023 it made another new peak at 4.65% and stayed high until November. It is now just over 4%.

This pattern was similar to the pattern in the USA and the Euro area. The main cause of large rate rises in all three places was the decision of their Central banks to go in for rapid and severe monetary tightening, as they belatedly woke up to the high inflation they had allowed or caused, depending on your view.

It is true that in the period September  26th to September 28th 2022 the UK had a  bad sell off in gilts . This was mainly caused by the Liability Driven Investment crisis.  The Bank has written of “severe dysfunction in  the UK government bond market when distressed forced selling of gilts by liability driven investment funds led to a fire sale dynamic”. The IMF also wrote  how  “liability driven investment funds were at the centre of the severe stress that emerged in the UK gilt (bond)  market”

There are those for political reasons who claim all this was brought on by so called unfunded tax cuts in the mini budget. They overlook the fact that the increases in  spending were considerably higher than the tax cuts, forget that the gilt market had fallen a long way that month before the budget because the Bank wanted a big rise in interest rates, and forget the role of LDI investors the following week in driving the market down more. The Chancellor did push the  deficit up more than I suggested  and could have done more to control spending. Nonetheless the pattern of rate rises and falls show that the main cause of the rate increases was Bank policy, and the main cause of the three day  meltdown was LDI troubles as owners of bonds they could not afford had to sell to pay their bills. It was very difficult finding buyers when they knew the Bank was about to sell £80 bn worth of bonds and LDI investors had to sell lots of bonds as well.

Further proof of this is how the Bank turned the gilt market round. By announcing purchases of bonds and suspending the planned sales the Bank brought the ten year rate back down to 3.1% by 20th November 2022.The fact that  the following year after a series of tax rises the rate went considerably higher than in September 2022 again underlines tax cuts were not the main issue.

90 Comments

  1. Peter Wood
    April 10, 2024

    Good Morning,
    Is there a Part 2 to this post?
    I think it needs quite a bit more detail and analysis, and a conclusion. A ‘whodunnit’?
    Can’t wait, it’ll be a riveting rea!

    1. Ian wragg
      April 10, 2024

      Off topic but what’s your views on Shell, BP and Glencore moving over to the NYSE. After years of hostility to oil and mining companies they’re about to up sticks to a friendlier environment.
      Same with the non doms, they will be gone taking their business with them.
      I bet the eco fascists in Parliament are over the moon that their Marxist policies are bearing fruit.
      After nearly 15 years in office there is a trail of destruction laid bare for everyone to see from our armed forces, power supply, train building, steel manufacturing, the list is endless.
      We really shouldn’t expect anything different from a government stuffed with an over representation of deviants and weirdos.
      The British public really do deserve better but they keep voting for the same. Let’s hope that’s about to change.

      1. Berkshire Alan
        April 10, 2024

        +1
        And many more in the pipeline Ian

        1. Timaction
          April 10, 2024

          As a moderate investor it’s obvious that with share purchase over regulation, taxation on purchase/sale, Capital Gains Taxes, Corporation taxes will drive our businesses abroad. Look at the performances of the Stock markets over the last 20 years. US, German and latterly Japan do not interfere or meddle as much as the Uni Party. Nut zero, costs of energy and windfall taxes will drive more away. We can’t afford the Tory’s welfare state, only the Bulgarians and the mass low wage immigrants welfare recipients can. We desperately need business friendly Governments. We need Reform.

      2. Hope
        April 10, 2024

        JR,
        Does your party have any influence over Govt. Policy?

      3. Mitchel
        April 11, 2024

        Read Angus Hanton’s “Vassal State-How America Runs Britain.”

        “Special Relationship” aka Puerto Rico-on -Thames!

    2. Lemming
      April 10, 2024

      I too look forward to further detail on how Ms Truss was right all along, how she was thwarted by woke international capital markets and hedge funds, and how the Conservatives will once again cause a huge increase in the cost of living – if we give them the chance at the next election. Vote wisely

      1. Hope
        April 10, 2024

        Today we read another Tory govt failing, ÂŁ54 million fraud allowed by DWP to Bulgarians. Why were they ever allowed to claim benefits? Back in 2003 it was highlighted about high crime from Eastern European countries allowed in to UK particularly sex workers in South East. What was done to rectify Labours stupidity, nothing it was built on by the Tory party.

        1. Berkshire Alan
          April 10, 2024

          Hope
          Because our continued policy on immigrants having access to a system that they have never made any contributions to, is just plain stupid.
          ÂŁ54,000,000 over 4 years plus, clearly the system is completely unfit for purpose, where were the checks ?

          1. Hope
            April 10, 2024

            75% windfall tax on oil and gas production by the low tax Tories until 2028! Tories rather import energy from hostile nations and organisations like the EU!

            How can GB have a healthy economy with idiots like Sunak and Hunt in charge!

          2. Donna
            April 10, 2024

            The Bulgarian Government should be required to pay us back.

        2. Lynn Atkinson
          April 10, 2024

          +1 the government fails on every question. There is no headroom to fund Bulgarians et al.

          1. Timaction
            April 10, 2024

            The annual bill for the illegal boat people has come in today at over
            ÂŁ 4000,000,000. That would pay a lot of health, dentistry services for the forgotten second class English tax paying people. No one ever deported until we get…… Reform.

          2. Berkshire Alan
            April 10, 2024

            Lynn
            I Guess they must have had thousands of different National Insurance numbers to fraudulently get that amount of money.
            What checks were there before new numbers were given out, and on what information.!
            This Country is played for as fools to the system and the system is broken does anyone in charge care ?

        3. A-tracy
          April 10, 2024

          So the office responsible for awarding these credits get away Scott free of blame because a Minister should have noticed the con trick? What are we paying civil servants for, have the ones that kept awarding this little group been checked to see if they were in on it.

    3. Hope
      April 10, 2024

      So what had the chancellor said or done to ensure financial stability during change of Govt.? That would be Sunak.

      Sunak’s judgement has been central to a considerable amount questions, ie his school boy errors losing taxpayers £12 billion then not wanting an investigation to recoup losses while Lord Agnew resigned, eat out to help out nonsense, furlough extended, his campaign for leadership before Johnson resigned, today he is on the radio still parroting Wragg was courageous! No Wragg should have been dropped and rigorous police investigation for any failings under Data Protection Act.

      I get the impression from his record as chancellor he was and is clueless but ready and willing to follow if it helps him.

      1. Donna
        April 10, 2024

        Well said. Sunak’s been an absolute liability for this country.

        1. Lynn Atkinson
          April 10, 2024

          Isn’t that a hate crime? Lucky you don’t live in Scotland đŸ˜‚đŸ€Ł where the U.K. Government ALLOWS the assembly to tax, pass unbelievably unjust legislation of all sorts.
          The disasters in Scotland and Wales are Sunak’s fault!

          1. Hope
            April 10, 2024

            Lynne,
            Better scrap PMQs then.

          2. Lifelogic
            April 11, 2024

            Blair’s disastrous and rigged & botched anti-English devolution – which was surely done because Blair, quite wrongly, thought it would help Labour. So what will Labour do this time to rig voting? Voting for non nationals? Lower the age of voting to 12 or so? After all they can choose to change their gender below that age.

        2. Hope
          April 10, 2024

          I forgot his EU sell out agreement to align GB and act in lock step while giving away N.Ireland, but somehow thinks it right to waste billions of taxes on Ukraine which is of no strategic value to our country.

          Who would appoint Cameron Foreign Secretary when looking at his record as PM? Dopey Sunak.

          Who rigged the EU referendum and stomped off against all his promises to the people of this country.

          Sunak ought to drag Cameron back from US. What an embarrassment for our country when Cameron called Trump divisive, stupid and wrong and labelled him in his book, protectionist, xenophobic and a misogynist!! Who would appoint him Foreign Secretary to deal with US and EU foreign policy!!

  2. formula57
    April 10, 2024

    Will we be permitted to know ever how a Liability Driven Investment crisis arose at all, given someone has responsibility for financial stability and ought to have understood the risks being run?

    1. Lifelogic
      April 10, 2024

      Indeed.

      The idea that it was a few days of Truss and Kwasi is totally absurd the bonfire was build by Sunak as Chancellor and Bailey as currency debaser. This together with the mad extended lockdowns, the net harm vaccines…

      The only way out of the current mess is some pro-growth policies ditch net zero, cut the size of the state in half, a bonfire of red tape, cut taxes, quality immigration only, take full advantage of Brexit… but Sunak has an agenda that is the complete reverse of this & growth (and now it seems on Net Zero even the ECHR have ideas above their station ref. Switzerland).

      1. Lifelogic
        April 10, 2024

        We must surely now leave the ECHR in protest about this mad CO2 Swiss ruling – but Sunak clearly will not.

        So we have police that do not attend most shopliftings or do anything about burglaries and prisons that are full & yet now Sunak is proposing another law. We have plenty of laws but no one is even trying to enforce them. Another law they do not enforce will do nothing whatsoever. Rather like your idiotic smoking by DoB law Sunak. Time to resign a stuffed teddy-bear who had some sensible policies would be far more popular.

        The government’s job is to ensure the state runs efficiently not to pass endless new laws that will also be ignored.

        1. Peter Wood
          April 10, 2024

          Not a word from PM Sunak on this ruling so far, perhaps he has no concerns. JRM was forthright yesterday but seems the slow-motion PM’s office doesn’t respond unless forced by the TV channels.

        2. Lifelogic
          April 10, 2024

          At London Bridge station today. I saw 2 shoplifters grabbing goods in about 5 minutes.

    2. Richard1
      April 10, 2024

      The pm and chancellor of the exchequer maybe?

    3. Ian B
      April 10, 2024

      @formula57 – He Graham Bailey pointed out the flaw when he was CEO at the FCA. His job required him to act to redress the the imbalance. He neglected to do this and has since seemingly sort to cover his own personal back by deflection

    4. IanT
      April 10, 2024

      The LDI crisis was a disaster waiting to happen, with senior people within both the The Pensions Regulator and the BoE either asleep at the wheel, deeply involved in LDIs personally (in a previous commercial role) or frankly just disciples of Gordon’s “Boom & Bust is Over” mantra (e.g interest rates will/can never rise again).
      In fact the Regulator issued a statement that the LDI crisis was a result of “a shock caused by the mini-budget”. This completely ignored the fact that a pensions analyst had precisely predicted this problem some 18 months before the event and that a number of the more sensible Pension Trustees had publically refused to touch LDIs with a barge pole. The BoE’s staff pension was not one of these however and had large LDI leverage. Clearly they also believed that rates could never go above 3%, in spite of the fact that the historical long term average for interest rates is about 5%. These are the people running our economy…

  3. Iain gill
    April 10, 2024

    So many people locked up who were innocent, so many lies told, yet none of those responsible have been arrested. Complete corporate evil there for all to see. Our ruling class and the post office is a case study in all that is wrong in this country.

    1. Lifelogic
      April 10, 2024

      How did the UK legal system judges and juries find so many people guilty or coerce them into pleading guilty to lesser offences when the mere numbers being accused showed rather more than reasonable doubt? What sort of incompetent defence lawyers did they have? Why would anyone assume any software system was infallible? Why no prosecutions or investigations for perverting the cause of justice or similar. Are the police hiding behind the inquiry to delay? It seems so. They are doing nothing on the vaccine criminal negligence too. Not even replying to Andrew Bridgen’s letter it seems.

      Rishi Sunak says letting kids change gender is ‘not a neutral act’. Did anyone ever think it was Sunak? Typical politician state the bleeding obvious either that or lie “the Covid Vaccines are unequivocally safe”, we will stop the boats, we have cut taxes, will grow the economy, cut NHS waiting lists, reduce government debt


      1. Iain gill
        April 11, 2024

        If I lied to a court, or lied to parliament, you can be sure I would be immediately arrested and charged. That nobody in the post office, Fujitsu, or their lawyers, have been dealt with in this way shows how badly run this country is.

    2. The Prangwizard
      April 10, 2024

      The corruption, moral and criminal includes many MPs, government and its administration.

      The trouble is MPs who know who are responsible and guilty are too cowardly to name names.

      1. Hope
        April 11, 2024

        No one prosecuted after the banking scandal and what changes were actually brought in to hold those responsible to account next time? Nothing springs to mind.

        Only a token few MPs given up to be prosecuted after MP scandal, there was widespread false accounting – even if overpaid. The problem being it would have brought down parliament and/or government. A policy decision made to prosecute a few. That is why we have no proper right to recall as promised. Another promise not delivered, same for cutting huge number of MPs, same for MP investigations. Cameron was in charge and promise a lot, sadly the failure is back helping Sunak to align UK to EU and prevent divergence as an independent sovereign nation. Sunak hosting EU summit here in July!

        Reply Any MP who stole money, created false invoices etc was prosecuted. Most MP s claimed sums they had spent on their second homes, showed the correct invoice and were reimbursed. Retrospectively the system decided some of the expenses claimed and approved should not have qualified. They were not crimes.

    3. Ian B
      April 10, 2024

      @Iain gill – A Conservative Government that has gone AWOL leaving no one to defend the very fabric of Society – honesty, transparency and accountability.

      1. iain gill
        April 10, 2024

        Integrity as a basic attribute is missing in so many people.

  4. Simon
    April 10, 2024

    Dear John, thank you for continuing to flag this very important issue that seems to have been forgotten by every other politician in the UK. It remains very concerning that notwithstanding these facts, all Labour politicians, including the leader and shadow chancellor, continue to put forward the blatant lie that the ‘Liz Truss budget crashed the economy’, even when the main controversial elements were not even enacted. How can this clear misrepresentation to the public be allowed? Are there not standards politicians need to abide by that when making claims like this to the general public they have to be fact checked? If not, is there not anything, legal or otherwise, the Conservative Party/Liz Truss can do to stop this falsehood continuing?

    1. Hat man
      April 10, 2024

      It’s a fact that Liz Truss committed a lot of money to compensating the public for high energy prices, and it wasn’t clear how the country could afford that level of increased state expenditure, without higher taxes. So Labour were given a perfect opportunity to raise doubt in the public mind about how competent the Tories were with the economy. That’s traditionally been the area where they have polled better than Labour. So of course Starmer and co. are going to bang on about the ‘Liz Truss budget’: it’s a successful campaign slogan, distorting but nevertheless basing itself on the facts of what happened. It continues to weaken the Tories, so Labour will go on using it. Sorry, Simon, but that’s just cynical everyday politics.

      Truss didn’t get the advice she needed, thought she had the powers-that-be on her side, and discovered too late that she didn’t. Her growth policy didn’t fit the ruling agenda.

      1. Lynn Atkinson
        April 10, 2024

        She got the advice, she rejected it. That’s why she deserves to be the laughing stock that she has become. Remember to laugh at HER and not at the proposed tax cuts.

        1. Hope
          April 10, 2024

          The same could be said of Osborne, Hammond, Zaharia, Javid and Sunak.

      2. Hope
        April 10, 2024

        Crucially, Why did the Tory party not make the correct analysis as JR did to support or save her?

        1. Lynn Atkinson
          April 10, 2024

          Because unlike JR, they are not Conservatives.

          1. Lifelogic
            April 10, 2024

            +1

    2. David Andrews
      April 10, 2024

      Misrepresentation is normal. A well informed rebuttal unit is needed to counter it. It is why you need to take anything you hear or see published with a large pinch of salt, be prepared to study the issue from primary sources and make up your own mind. I think the Truss government was stitched up by those who did not want it to succeed.

      1. Margaret
        April 10, 2024

        Primary evidence is ignored these days.

        1. Lynn Atkinson
          April 10, 2024

          Facts re so ‘yesterday’. This is the post-truth era.

    3. Richard1
      April 10, 2024

      Dogs bark ducks quack and politicians will seek advantage where they can. The trick if you want to avoid a Labour govt is not to give them the chance. In the mind of the public the truss episode was ERM 2.0. The reasons truss was so hopeless is she didn’t think it through properly, wasn’t articulate enough to explain what she was doing and so limit the damage, and then U-turned in a panic. She should never have been chosen as PM. She wasn’t up to it.

      1. Lifelogic
        April 10, 2024

        Well she was a LibDim at Oxford and read PPE, so clearly not very bright. But she has cottoned on a bit since then.

      2. Mickey Taking
        April 10, 2024

        It is not that a Labour Government is wanted, it is that this supposed Tory Government is decidely NOT wanted.

    4. Dave Andrews
      April 10, 2024

      When you’re in the hot seat yourself, it’s very convenient to have a scapegoat you can pile the blame on. Our system insists on one person taking the blame, which means no one dares put their hand up just to take a small share. See the Postmaster scandal or the Grenfell cladding issue.

    5. Cynic
      April 10, 2024

      How many people can follow the technicalities of the Bond market and LDI’s? Far easier to blame it all on Liz Truss and her Budget.

    6. IanT
      April 10, 2024

      I doubt anything has been “forgotten” Simon – the sad truth is that it has suited both the Opposition and many in the Media to present the rise in interst rates (and therefore mortgages) as being all down to the Truss Budget, when in fact that was really just another (rather small) bump in an already very badly holed road. Whatever the “Truth” of the matter, it is now the common narrative (and belief) that it was ALL the Truss Governments fault – something that was perhaps also promoted by certain elements of the Conservative Party at the time. This has now come back to bite them because they are also seen to be part of a long record of Tory economic incompetance. This is true of course but ignores the stupidity of others in this sorry tale. Liz Truss may deserve some brick bats but Andrew Bailey is still sat there in his job and one really has to wonder why?

    7. Lifelogic
      April 10, 2024

      The Current Conservative party is all about endless lies:- they claim they have cut taxes, are growing the economy, crime is down, they are cutting NHS waiting lists, the Covid vaccines were and are safe, they are stopping the boats, growing the economy, the net harm lockdowns were needed, they are cutting state sector debt, aiming for net zero in essential and beneficial (it is neither of these), renewable are cheap (they are not)


      THE Energy Secretary has led a Tory backlash against the European Court of Human Rights after it issued a landmark ruling that governments have a duty to protect people from climate change. Claire Coutinho said she was “concerned” that Strasbourg judges were taking over decisions best made by elected politicians. So will Rishi Sunak do anything to take Britain out of the European Convention on Human Rights (ECHR) in the wake of this absurd ruling (under right to a family life amazing how far they can stretch this lunacy). The perfect excuse to change his mind and leave now but he won’t of course.

      How many ECHR lawyers and these elderly Swiss women bringing the action understand Energy, Physics, Engineering, Climate? Perhaps 1% at best perhaps.

  5. Richard1
    April 10, 2024

    From a Conservative point of view it is a great pity this episode was so poorly planned, thought through and presented. The political initiative was needlessly thrown to the left and the blob seized power. The blunt truth is had the Conservative Party selected Sunak and not Truss in the summer of ‘22 we would not be in the hopeless electoral position we now are.

  6. DOM
    April 10, 2024

    I’m sorry but if John isn’t going to name names then this article becomes pointless

  7. Javelin
    April 10, 2024

    Who were these liability driven investment funds ? Do we have the names of the banks and hedge funds ?

    1. IanT
      April 10, 2024

      They were nearly all Final Salary funds needing income to pay their pensioner base, many of them in the Public Sector (including the BoE). The Hedge Funds part in this fiasco was to spot an opportunity to make a quick few million by shorting Gilts.
      Also part of a larger problem that’s been going on for 20+ years as the big UK pension providers moved out of UK equity and into Gilts/Bonds, part of the reason London looks so cheap compared to New York. If Big Oil (Shell & BP) leave the FTSE 100, then you can kiss goodbye to London as a major stock exchange – we’ll be down with the mid-rangers like Milan and Madrid.
      Whoever get’s into government better get their socks on and start making London a much more attractive place to trade or they will lose a huge amount of income and then we will all lose out! What an unholy mess and an avoidable one too…

  8. Javelin
    April 10, 2024

    There is a document at imf dot com called

    Lessons from the United Kingdom’s Liability-Driven Investment (LDI) Crisis

    1. Javelin
      April 10, 2024

      From what I can see in the INF report it was defined benefit pension funds (ie Government Pensions) that held these bonds that were at risk. In otherwords Liz Truss threatened civil servants pensions so they brought the Government down.

      1. Javelin
        April 10, 2024

        The top three LDI managers occupy roughly 70 percent of the LDI market. With L&G at 43%.

        “The UK market is split between three providers: BlackRock, which acquired Barclays Global Investors, generally considered the first to market; Insight Investment, an asset manager that has carved out a profitable niche in LDI; and Legal & General Investment Management, the third to the market but now the biggest, according to the survey, with 43% of UK liabilities hedged.”

        1. IanT
          April 10, 2024

          The LDI “Providers” were not taking any risks J. It was their clients money that was at risk, not theirs. The Financial Industry is not in business to lose money but they are not (quite so) worried about losing yours (provided you keep on paying their fees of course) Neil Woodfords clients found this out the hard way. It can be an expensive mistake to trust others to look after your money – much better to learn how to do it for yourself in my experience.

  9. Bloke
    April 10, 2024

    Opinions vary and persist about different causes.
    Many are right, but the fundamental cause is the vastly over-increased population.
    Virtually nothing will provide a solution until that massive growing number is stopped and reversed.

  10. Donna
    April 10, 2024

    The Globalists and LibCONs wanted Sunak as PM. The Tory Party membership rejected him – twice – and chose Liz Truss.

    The Queen died almost the next day, which gave the Globalists and LibCONs plenty of time and opportunity to plan their next moves. Unfortunately, Truss and Kwarteng did not create the circumstances which led to the Market instability. It had been primed by the B of E and the former Chancellor, now PM, but they are responsible for naively walking into the trap.

    It was a coup. I believe the IMF and WEF are ultimately responsible with the B of E acting on their instructions/behalf. It still is, with Sunak and Hunt, the IMF/WEF’s puppets, permitting it.

    1. Hope
      April 10, 2024

      +many

  11. Roy Grainger
    April 10, 2024

    And who was the regulator at the time final salary pension funds were being put at risk through excessive gearing via LDIs including the BoE’s own pension fund to the extent of 100% ? The head of the FCA at the time Andrew Bailey who the Conservatives then thought was the best candidate to run the BoE. So you can complain John but the fault lies with the Conservatives.

  12. James Freeman
    April 10, 2024

    Introducing quantitative easing and ultra-low interest rates after the financial crash was always a terrible idea. Once it ended, it was painful for the economy. The LDI crisis is just one example; Thames Water is another.

    Below inflation interest rates had a direct impact on individual savings, setting the stage for future problems such as diminished pension pots. The lure of more stable assets like property and increased gearing for companies was strong, diverting funds from more risky high-growth investments. This shift in investment patterns is a key factor in the recent era of low economic growth.

    The taxpayer has ended up footing the bill for this failed experiment. It would never have happened if the Bank of England had not been nationalised.

  13. MFD
    April 10, 2024

    As the uneducated man on the street , the one thing that makes me annoyed is the blatent lies from those who describe themselves as “ right honourable”!
    Disgusting!

  14. Narrow Shoulders
    April 10, 2024

    These events seem to me to be much more appropriate for a long term and in depth review than the covid overreaction.

    A cohort needs to be held accountable and if it is the private sector measure should be put in place to ensure that it can’t happen again. If the public sector drove the outcome gongs should be rescinded and prison awaits.

  15. Iain gill
    April 10, 2024

    Listening to Rishi on the radio.

    What a complete idiot. Completely and utterly out of touch and clueless.

    Really Conservative party get a grip, FFS this is not good enough.

    Absolutely shocking that this guy has the nerve to show his face.

    1. glen cullen
      April 10, 2024

      He was the same when he was the chancellor

  16. Everhopeful
    April 10, 2024

    I must say that when Liz came on the scene I breathed a sigh of relief.
    Naively I thought we had returned to some degree of sanity and that things would improve.
    On reflection of course that could not be allowed to happen.
    Apparently our late and extremely wise Queen advised her to “pace yourself”.
    Sounds as if she too wanted the country to be saved?

  17. Sea_Warrior
    April 10, 2024

    I see that the sensible Swiss have backed away from ‘retail’ use of CBDCs – the government there being wise enough to know what will happen if the matter ever gets to a referendum. Can I now expect Sunak to take a look at the totality of the WEF’s agenda and to see its evil? And then to see him take to the No 10 podium and give a philosphical analysis of the WEF’s workings, and the threat it poses to democracy? And then to see a succession of Secretaries of State deliver statements, at the Dispatch Box, distancing HMG policies from that agenda? Or should I just give up on this country and move to Switzerland?

  18. THUTCH
    April 10, 2024

    You are correct Sir John, but the narrative is lost. Labour and most MSM will continue to play up the Truss mini budget and the reputation for economic incompetence will not easily be shed.

    1. Everhopeful
      April 10, 2024

      Not wrong there.
      Today I received a horrible postcard from Labour entitled “ Conservative Pension Chaos”.
      All about the alleged move to scrap national insurance contributions and claiming that the state pension is at risk.
      The present situation is all very dire but there just might be a few actual conservatives left in the ruling LibDem entryist party.
      However people try to fool themselves 
we all KNOW precisely what a labour govt. will bring.

  19. Mike Wilson
    April 10, 2024

    Notwithstanding the forgoing, who can we, the people, expect to manage the economy and the Bank of England and government borrowing (the issuing of gilts)? The answer l, of course, is our elected representatives. You have failed us badly. Time to get out of the way and accept the current Conservative Party cannot govern.

  20. Berkshire Alan
    April 10, 2024

    Afraid Politics now in many Countries, including our own is media driven.
    Upset the Media in any way, or if plans going forward do not meet their own hidden agenda, and you suffer the backlash of continuous negative reporting, add to that the fact that almost everyone seems to want to blame the government for all of there own problems, even those self made, and you get a tidal wave of negative publicity.
    Unfortunately we now get continuous news 24 hours a day, and because of that the media has to find, invent and exaggerate stories which would have never have gained air time a few decades ago.
    I have no solution, but certainly the Government have to get their own communication to the public set up in a way that promotes its policies, in a truthful and coherent manner, and at the moment it is failing the test big time.

    1. Berkshire Alan
      April 10, 2024

      Any reason why this is being kept in moderation John, have I offended or slandered anyone ?

  21. Ian B
    April 10, 2024

    Liability Driven Investment pointed out as a problem in the making by the then CEO of the Financially Conduct Authority, Andrew Bailey. He refused to act, as his job required him to do, seemingly leaving it until his job changed and his neglect of duty at the FCA came back to haunt him when placed in charge of the BoE. He had been exposed as being inadequate. The incoming PM Liz Truss with Chancellor Kwasi Kwarteng were left in the position that the establishment, the default failing ideology was destroying the Country and there was a race to right the wrongs. This exposed the failings at the Treasury and the BoE. Bailey being first and foremost a left-wing politician choose to kick back hide his errors and punish all the people in the UK.
    Truss rocked the boat, may be the presentation could have been different but time was against her the UK was being driven into the ground. But something desperate was needed to shake the establishment out of its malaise, and quickly. Seemingly the there was a sudden media frenzy of briefings against the Conservative Government for trying to get things done. The markets, those that make money by movement played along – they were doing their job making money.
    The UK is still being driven into the ground with such veracity and hate its hard to see how it can recover. The Conservative Government has gone AWOL, they won’t defend democracy, society, freedoms, the UK’s very being. They have become prolific Socialist spenders with no interest in managing or controlling expenditure, they will tax the UK out of existence, but why should they care the job is nearly done and they will be departing. They the Conservative Government will retain Bailey, steal from the taxpayer to cover his mistakes as it fits in with their malicious destruction of the UK

  22. Christine
    April 10, 2024

    I agree. We also see so many little people prosecuted for minor offences, like currently that mother who refused to have her disabled son vaccinated against Covid and yet those culpable for the banking crisis in 2008 and the post office scandal not only got off Scot-free but were rewarded. The justice system in the UK is so bias, the blindfold fell of the scales of justice years ago and things are about to get much worse with the introduction of all these hate speech laws to silence critics of the political narrative. Because mark my words that’s their true intention.

  23. miami.mode
    April 10, 2024

    …….On the Liz Truss budget “the increases in spending were considerably higher than the tax cuts”……

    Surely part of the problem was that she guaranteed a fuel price cap for around 18 months with no idea about how high prices could go. Rather similar to short selling of shares with no clue about potential losses if you have to buy them back again. Rishi Sunak immediately reduced the period to around 6 months. A quick check with the fuel providers would have given him some idea of the liabilities over the shorter period.

  24. Original Richard
    April 10, 2024

    Deliberating on the finer points of bond yields and mortgage rates is the equivalent to the captain of the Titanic re-arranging the deck chairs as the nation heads for the twin icebergs of nation destroying mass immigration (legal and illegal) and economy destroying Net Zero.

    War is peace, freedom is slavery, ignorance is strength, diversity is harmony and Net Zero is prosperity.

  25. glen cullen
    April 10, 2024

    SirJ, you can see it, we can see it 
.. so why can’t the chancellor, the treasury and the BoE see it

  26. Bert+Young
    April 10, 2024

    Economic stimulation is badly needed ; motivation does not seem to be the motif of this Government they want to stifle all manner of things in the pretence it is necessary for “recovery”. Those who are capable and show initiative are also being driven to live and invest elsewhere – is the Government completely mad ?.

  27. Lynn Atkinson
    April 10, 2024

    On the same theme – the delusion of the political class, it’s been reported in the Telegraph (at last) that Zelensky intends to conscript women. Must be because the reports of 500,000 KIA and severely wounded Ukrainians is a lie.
    The western Institute for The Study of War (Victoria Nuland’s family firm, she who descended etc ed ) calculates Russian losses at < 40,000.

    1. Mitchel
      April 11, 2024

      An Estonian MEP recently made a speech in the Europarl demanding that member states send back to Ukraine the 800,000 young men who had fled that country to avoid earlier rounds of conscription.

  28. Ian B
    April 10, 2024

    MsM soundbites, on the BoE

    In the round, however, the Bank was no more guilty of policy failure than any of the others, and to therefore appoint someone who is very much part of the same central bankers “club” to undertake the review doesn’t exactly inspire confidence.
    Bernanke is almost bound to pull his punches. And not least because he is widely thought of as the intellectual godfather of quantitative easing (QE)
    Don’t expect anything radical; self-appointed reviews tend to be just a means of deflecting unwanted criticism, or otherwise kicking it into the long grass.
    Jeremy Warner the Telegraph

    Being wrong is one thing, always being wrong is the Conservative Governments neglect and not caring

  29. Ian B
    April 10, 2024

    After China’s much heralded Auto industry subsidy that has been ÂŁ57 billion. Today we get…

    China’s largest carmaker received £2.9bn in state subsidies to dominate EV market, study says
    Chinese manufacturer BYD received at least ÂŁ2.9bn in direct state aid
    Then – China hits out at ‘discriminatory’ and ‘protectionist’ Brussels amid deepening trade war. Which pot is calling which pot ‘black’ ?
    All the UK’s EV’s only exist as a result of importing heavily subsidised components form China. Even PM’s Sunak’s Somerset factory will only be an assembly facility for Chinese components. The facility might be headlined Indian but it involves AESC, a battery manufacturer under Chinese ownership, something this government has been trying to suppress.
    UK industry can’t get out of the starting block due to this Conservatives Governments failure to carry out basic due diligence so always ensuring UK Taxpayer money gets to leave the Country. Elsewhere(Other Countries) Taxpayer money gets to circulate in its own economy – Sunak/Hunt refuse that for the UK

  30. Lynn Atkinson
    April 10, 2024

    This government, having robbed the voters blind now proposes robbing other countries. Does it think it is above all law?

    â–ȘBritain and the United States have “made progress” on the issue of transferring Russian frozen assets to Ukraine

    According to the kingdom’s Foreign Minister David Cameron, they plan to propose a scheme for taking away other people’s money at the G7 summit in June.

  31. a-tracy
    April 12, 2024

    John, I’ve read a couple of replies to your Twitter X post. They say the BoE is selling the bonds in this way as it reduces cash in the system to fight inflation.

    How does it take money out of the economy to place downward pressure on inflation?

    Reply Because the people who buy the bonds pay with cash they could spend on something else. It is a way of cutting the money supply

  32. Reform_Now
    April 13, 2024

    Commentators here have written of this scenario here before. Adding that the BoE’s own pension fund was 100% invested in LDI funds at the time.

    Other points to add were that the BoE’s announcements were somewhat bizarre and the timing of trashing the markets by announcing sales then, when Truss was gone, fixing markets by announcing purchases… all smacks of “deep state”.

    Strangely, Truss appointed Hunt after sacking Kwarteng.

    A point made at the time, and picked up in the article, is that 10-year rates have been higher than at the time of the Truss/Kwarteng Budget… and nobody says a word. If these are not the actions of deep state actors then I don’t know what other evidence people need. The problem is… so few people are paying attention – partly because so few are capable of understanding or caring about such issues.

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