Category: Uncategorized

There is growing suspicion of government by international treaties. Democratic countries find increasing restrictions on what their elected representatives can do as they tie themselves in a colonial type relationship to global and regional quangos. The ultimate most powerful one is the EU

Prime Ministers and Presidents  are expected to devote considerable precious time and energy to travelling around the world to talk to each other at conferences. This is increasingly bizarre, full of hypocrisy as most of them tell the rest of us to give up jet travel to save the planet. These  all too regular events come with a price, normally requiring the leaders to pledge more public spending to some global cause. They also can result in signing up to expensive and freedom sapping future commitments, as with the net zero plans at successive COPs.

These conferences also have an opportunity cost. Leaders strutting at conferences cannot at the same time pursue domestic aims and solve home problems. Money and above all precious Leader time and energy is diverted. Leaders are also more exposed to the press and international pressure groups which can result in illjudged or unwanted commitments. These gatherings are thought to promote more trade friendship and understanding but can instead create or worsen disagreements through presence which might otherwise lie dormant.

The recent wish to host President Biden in Northern Ireland was a good example of  a badly judged visit which highlighted the differences. It had come with the high price of the Windsor Agreement.

Facts4eu have taken up my arguments over GDP growth rates last year and this:

Facts4EU Article: https://facts4eu.org/news/2023_apr_bbc_fake_news

Facts4EU Twitter: https://twitter.com/Facts4euOrg/status/1647473668295991296?s=20

Facts4EU Facebook: https://www.facebook.com/Facts4EU/posts/pfbid02TDEFy4yzNrLAdCGoQN98ibMyqzmyRRsknKWiw2iTvSvLauDk1Kg6V8vWrjrVG56Zl

There will be a debate over the proposed new WHO Treaty obligations on Monday. I will oppose the UK accepting new legally binding obligations to future WHO decisions unknown.

Rishi Sunak took a gamble in Scotland. He decided to use the powers of the Union Parliament to challenge a piece of SNP legislation wanted by the Scottish Parliament, because it intrudes on reserved matters to the Union Parliament. It also  happened to be unpopular with many Scottish voters, and with two of the three SNP challengers for the job of First Minister. His was the first successful challenge to a then dominant Nicola Sturgeon who  used the job of First Minister as a constant campaign platform against the Union. Subsequent events led to  her resignation, to a bad leadership contest and a series of as yet unanswered questions about SNP party funding which are doing them huge damage. It looks as if the Union will emerge stronger in Scotland for this chain of events. The PM tells us he is a Unionist and he can be pleased with what has happened and the stance  he took.

So it is even more surprising that faced with the opportunity to support Unionists in Northern Ireland he chose the opposite course and sided more with the EU and the Republic of Ireland when it came to resolving issues over the temporary Northern Ireland Protocol. This Protocol contained its own clauses looking forward to future amendment or termination and invited a better answer to be wrapped into the Future Trading Agreement between the UK and EU. The UK anyway had passed a Bill through the Commons to fix the matters unilaterally if the EU continued on its course of refusing to deal with the serious worries of the Unionists.

I am still trying to  get some answers to  very simple questions about the Windsor Agreement. I am told I cannot table a question again to ask which EU laws apply to Northern Ireland. Why is this a secret? We were told 1700 pages of law would b e disapplied. Which pages? Why has this  list not  been published?  We were told only 3% of EU law remains. So if they know the percentage they must know the laws. How was the percentage calculated? Can we see the lists and the way they assessed the volume of total law? The Union needs defending in all parts of the UK.

The latest addition to the Monetary Policy Committee is an economist who mainly tweets on Greece and the USA. She comes to the task with some scepticism about the lurch from Quantitative easing to Quantitative tightening and with an understanding that tight money policies bring recessions. This scepticism is going to be much needed as she listens to the group think that brought us 10% inflation against a target of 2% and then forecast a five quarter slump. The Bank has a long history of getting it wrong. It has specialised in boom/bust policies all my adult life. It has a habit of running easy money for too long to get inflation up, then for overcorrecting to  get it down doing great damage to jobs, output and sometimes to banks.

They recommended the European Exchange Rate Mechanism, the ultimate wild ride boom/bust machine. In the 1980s it meant selling pounds, keeping interest rates low and fostering excessive sterling money and credit, to be followed  by buying up pounds, hiking rates too high and creating a big recession. The government, Opposition and CBI all supported this madness. I took the quoted company I led at the time out of the CBI at the start of this misery in protest at the policy.

They allowed low rates and fast money growth in the period 2004-7, telling us big banks had new ways of controlling risk which made it fine for them to lend large sums in relation to their capital. Then in 2008 they turned round and blamed the banks for the excesses they had helped engineer, hiked rates and watched as a banking crash unfolded, followed by the Great recession. Many of us predicted the folly of overexpanding credit and borrowing in the run up to the crash.

They rightly created plenty of money and bought bonds to depress rates during the covid lockdown of 2020, but then added fuel to the inflationary fires by carrying on with Quantitative easing throughout 2021 when some of us were telling them it would be inflationary. Inflation hit 5.5% before the invasion of Ukraine which they solely blame for the inflation that was  inherent in their policy choice, and was absent in Japan and China despite energy prices.

Now they are following the austerity policy of Quantitative tightening long after their own forecasts tell them there will be a recession and inflation will tumble. Why? Either the forecasts are completely wrong or the policy is wrong, or both. My view is they  have done enough to bring inflation down next year. They should tighten by not replacing bonds they own when they repay, but they should not be selling more bonds at a loss.

EXCLUSIVE : Liz Truss is back – on freedom, values, growth, low taxes, smaller state, higher incomes, wokery, gender politics, China, Russia, defence… and Macron & Biden.

In a pivotal speech in Washington DC, the former PM takes no prisoners.

CIBUK Article : https://cibuk.org/truss-speech-on-freedoms-taxes-wokery-china-russia-defence-macron-biden/

CIBUK Twitter : https://twitter.com/CibukOrg/status/1646760380910166016

CIBUK Facebook : https://www.facebook.com/CIBUKOrg/posts/173292792289822

Facts4EU Article: https://facts4eu.org/news/2023_apr_truss_is_back

Facts4EU Twitter: https://twitter.com/Facts4euOrg/status/1646739413106393094?s=20

Facts4EU Facebook: https://www.facebook.com/Facts4EU/posts/pfbid0Rz8gvedZvY43wUHzDAcTw9z2ectu4mp6cCh4ne4H681PvhvMNUESMz6AiBY2u86Xl

The IMF this week released a table of growth rates in GDP for the main economies of the world. It contained three years. The actual figures for 2022 and two forecast years, 2023 and 2024. The forecasts were changed from the previous forecasts for the same years, as they regularly do.

The BBC spent the day following the release running with the story that the UK is the poorest performing major economy according to the IMF. This was based on the IMF GDP forecasts for just 2023. It was usually presented as fact or news, rather than as one of many forecasts for the upcoming year which might or might not be right. So called experts were asked to comment on why we are the worst performing economy, not on the quality of the forecasts or why the forecasters thought that could happen. They were sometimes expressly asked if that was the result of Brexit.

The BBC could have led with the story that the IMF confirmed that the UK was the fastest growing economy in 2022 on the official figures, the only fact in the release. The UK’s growth rate of 4% compared with China 3%, USA 2.1%, Germany 1.8%, France 2.6% and Japan 1.1%. No expert was dragged on to be asked if that outperformance  “was due to Brexit”.

They could have provided a more balanced account by saying the IMF’s 3 year figures combining actuals and estimates show the UK ahead of France, Germany and Japan but behind the USA and Italy. They could have asked experts to comment on how we could could be even closer to  the US rate of growth and less like the German one.

The fact they did not choose to tells us the state of BBC economic commentary remains poor.

During his brief  morning stop in Northern Ireland on the way to his three day stay in the Republic of Ireland the President could have held out a hand of friendship to the Unionist community. He could have  said on reflection he had been hasty to encourage an EU/UK deal, as he now saw that one on the wrong terms alienated the Unionist community and undermined  the Good  Friday Agreement. He could have pledged to ask the EU to change their stance to reduce the risk of damaging NI’s place in the UK as well as burdening UK trade between GB and NI with too many  barriers. The deal done has not resolved the problems. it has destabilised NI by re opening constitutional issues that the GFA had put to rest.

Instead he pretended there was no real issue, just unreasonable Unionists. He was not able to have a celebratory banquet for 25 years of the GFA. He could not make a speech to Stormont as it cannot sit. The original ideas behind the visit were cancelled so the NI visit was shortened.

The Prime Minister should  have used the brief encounter to start work on restoring Stormont by engaging the President in the  need to get the EU to change its stubborn and unhelpful stance. He could have made the Unionist case to balance the Republican case implicit in the President’s words and deeds.

He did not do so. He seemed to go along with the idea that the Unionists should accept the EU/Republic of Ireland settlement and live with EU law making in their part of the UK. It was a bad missed opportunity, a tragedy for our country.

The IMF thinks all the western advanced economies will slow down a lot this year. Of course they will, because the Federal Reserve Board in the USA, the European Central Bank and the Bank of England have shifted from very inflationary policies to very tight policies. They have hiked interest rates, stopped buying up bonds and encouraged a credit squeeze. On top of this the UK has had a tax raising budget to add to the squeeze, whilst the Bank of England has gone for an ultra austere policy of selling bonds it owns at losses to drive up mortgages and other interest rates. The IMF as a result puts the UK towards the bottom of the pack for the year ahead after a great 2022. It may be too optimistic about some of the others, given the need for the Euro area to take more action to get inflation down.

These lurches of policy by advanced countries are unhelpful and unnecessary. Switzerland, China and Japan avoided the high inflation figures  of the USA and Europe/UK by not buying up so many bonds and running such a loose policy.  Only the UK has added a large rise in business tax and substantial fiscal drag on personal income taxes by not raising allowances in line with inflation. These tax changes will ensure slower growth. The  business tax rises when added to the windfall taxes hitting the energy sector will ensure weak investment flows in the year ahead adding to the downturn. The Bank of England should reduce the severity of its bond sales, allowing its balance sheet to shrink as bonds fall due for repayment. The Treasury should abandon its tax rises and understand that it will collect more revenue if it allows more growth.

In an interesting recent IMF blog three senior officials advise Central Banks on how to balance counter  inflation policy with the need to avoid problems with banks and non bank financial institutions.

They look at how UK pension funds and liability driven investment strategies revealed “the perilous interplay of leverage, liquidity risk and inter connectedness”. They query how a Central Bank injecting liquidity to ease such a situation could complicate the fight against inflation. They  propose three types of permitted intervention.  Discretionary market wide intervention targeted to segments at risk. Lender of last resort loans. Standing  loan facilities for non bank financial institutions in need.

They go on to stress “Clear communication is critical, so that liquidity support is not perceived to be working at cross purposes with monetary policy. For example, purchasing assets to restore stability while continuing with quantitative tightening to bring inflation back to target may cloud intent and complicate communication. “ Yet this is what the Bank of England tried over LDI.

This  is what the Bank of England did. They deliberately drove bond prices down by announcing  and commencing a large bond sale programme. This led to big losses in pension funds, and more calls for cash on the geared positions in government bonds LDI funds were running.  LDI funds then also sold bonds to meet calls making their positions worse and increasing the losses. The Bank then bought up some bonds to reverse some of the price falls it had helped create.

The truth is the Fed and the Bank of England printed too much money and kept rates too low in 2021.In the last year they rushed to tighten, causing tremors in UK pension funds and some US regional banks. When financial instability  appeared they both eased by supplying money to markets offsetting the severe Quantitative tightening they were still executing. They should both take money and credit growth more seriously and stop lurching from too easy to too tight.

It is strange the leading western Central banks all thought they could create money and buy bonds at ever higher prices to ease conditions without it causing inflation. They were wrong. Now they think they can sell bonds at ever lower prices, tightening money and drying up liquidity without it causing any problems amongst banks, pension funds and other large holders of bonds.  Why?