These clueless amateurs surely can’t survive any more Bad Calls

ON THE 22nd July I warned in this newspaper: “The bond markets are pretty powerful and determine the price at which the UK can borrow along with their buddies the stock market and the foreign exchange markets. The benefit for the British people is that they prevent politicians from doing stupid stuff.”

And later: “Advisers are likely to have to explain to Truss that most of the economic stuff you proposed is not doable as one or more of the big three markets will collapse before your very eyes.”

We now have the benefit of hindsight, and we can see that is precisely what happened. Truss became PM on 6 September and the month since then seems like a lifetime.

Her very first action was to not listen to her adviser; in fact he was fired on day one. That was the Permanent Secretary to the Treasury Sir Tom Scholar, which generated outrage from a couple of prior holders of the position, Lords O’Donnell and Macpherson. It is clear if the Government had listened to him, he surely would have prevented at least some of the disasters to follow. Bad Call #1.

Her new Chancellor Kwasi Kwarteng, soon to be known as Kamikaze, announced the lifting of the cap on banker’s bonuses. This was a really dumb move when so many ordinary people are struggling to pay their bills: the optics were terrible. Bad Call #2.

Bad Call #3 was dismissing the need for an OBR evaluation of the tax and spend measures that were to come.

Bad Call #4 was announcing a set of measures to reduce energy bills that were unfunded. A windfall tax was certainly the smart way to go as has happened in the EU. Also, funding was not based on need which the IMF subsequently criticized.

President Biden tweeted his opposition to trickledown economics that was the PM’s platform in the Tory leadership campaign. He also refused to meet with Truss even though he was a mile down the road when he came for the Queen’s funeral. We should note that Biden got 81 million votes compared with her 81,000. Later on he made clear to our new PM there was going to be no US-UK trade deal. Oops. Bad Call #5.

Then the big one: Bad Call #6 came on Black Friday September 23, and with it the ultimate banana skin as the bond and foreign exchange markets collapsed. The markets didn’t like unfunded tax cuts for the rich and tax rises for the poor. The pound collapsed to $1.03 and the bond markets went haywire to such an extent that pension funds were close to collapse. The Bank of England had to intervene and stop its quantitative tightening program and provide liquidity to ensure the pension funds could stay afloat.

Bad Call #7 was when Kamikaze committed a schoolboy error a couple of days after the announcement and said more tax cuts were coming. Then Simon Clarke later explained, of course, that big spending cuts were coming to ensure the poor were hit even harder.

Then the mortgage market collapsed with most sellers including HSBC, Halifax, Santander, Virgin, and Skipton withdrawing products. The cost of a mortgage shot up which meant many new buyers couldn’t afford one. MPs I have spoken with have told me they are inundated with people whose fixed rate mortgages are set to expire soon and they are likely to see costs jump from low single to double digits. This on top of rising heating and eating bills.

Bad Call #8 was to send Truss out for eight car crash interviews with local radio stations after four days of silence. Dan Snow, the historian, declared it as “the worst provincial campaign of any of our leaders since autumn 1216 when King John caught dysentery in Norfolk, lost the crown jewels in The Wash & died in Nottinghamshire.” They and their supporters claimed it was the fault of Putin, Starmer, and Remainers and every other country had had it but were laughed out of town.

I have never seen anything like this. I call it the economics of pandemonium. It is unclear what can be done to fix the mess the clueless amateurs have created. The first thing to do is to send the PM and her misguided Chancellor packing in disgrace, back to the Institute of Economic Affairs from whence they came to be never heard of again. Then scrap the package and start over. Eight Bad Calls in a month is enough. My guess is she won’t survive any more Bad Calls.

The first thing to do is to send the PM and her misguided Chancellor packing in disgrace, back to the Institute of Economic Affairs from whence they came