Pound-Dollar parity now a one-in-four chance

[sunnydaytoday0]

Anyone else worried about implications of the continual slide in the value of the pound against the dollar on our economy? I know the dollar is strong at the moment, but sterling fell sharply on Friday after the mini budget losing another 3% of its value to a 37-year low. Asian markets have opened and it's now below $1.0770, down about 0.8% from Friday. Sterling's all time-low is around $1.05. According to Bloomberg there's a 1 in 4 chance parity will be reached within 6 months.

It's not just going to be much more expensive going to the states but a lot of our imports will become even more expensive, including fuel, foods, cars etc.

Is this just something we will now have to suck up and accept as an effect of the government's fiscal policy - trying to finance such huge national borrowing amidst our deteriorating economic backdrop?

Being out of the single market is killing us. Unless we go back in I don’t know what options are available to stimulate the economy or avoid long term stagflation. We were warned Brexit would kill our economy and now it’s happening and it will only get worse. Kwarteng is now throwing all his chips on the gambling table but unless we reverse Brexit we will not recover. We’re going into the mother of all recessions. Begging rich people to stay and pay tax is a sign of desperation but they are the net contributors not red wall and people under £40k a year and we will need them.

Lewis Goodall did a good podcast on the News Agents on Friday or Saturday that may help explain it. I found it clear and jargon free

Thanks granny cake, I’ll have a listen.

Gilts are being hammered. This is all looking very bad. Markets do not like shock tax cuts.

unless we reverse Brexit we will not recover

You can’t seriously want to re-join the EU? Didn’t you see what is happening with the Euro vs the Dollar? Do you think the Germans have any way out of the energy shocks that will hit this winter?

(I mean, they could dig for coal again and fire up those coal plants, that’s really the only recourse they have, but the public won’t like it 😝)

Seconding the News Agents podcast from Friday. Well worth a listen.

I don’t think we would be permitted to rejoin the EU in full but we should be in the single market at least. We’re circling the drain because the Leave camp don’t understand how the economy works. Notice how the Wetherspoons bloke and James Dyson have shut up?

We need serious economic growth now to make up for massive losses.

Although many of you hate bankers, they were a sizeable percentage of our tax base. Cash in hand tradesmen,fishermen and Wetherspoons can’t replace that. The red wall areas will not replace London as an economic powerhouse because they are not as productive so we need to kick start the engine again. Feelings will be hurt by my saying this but it’s a truth backed up by data.

If you want them to stay how should the next GE go.. because whatever is offered as an incentive won’t last

Didn’t you see what is happening with the Euro vs the Dollar?

I have, last time I looked Euro was indeed down, like many currencies down on the USD but it was up on Sterling - like many currencies.

You've got to look at least three ways at the moment to gauge whether Sterling is an outlier due HMG action or really just suffering alongside everybody else.

The only thing that can do is reverse their policies - which they won't do as they are bonkers and very incompetent - or raise rates, which will create more problems economically and for people and businesses with debt.

BUT I'm sure there are people (bots) out there who think it would have been worse under Corbyn! The difference would have been the money would have ended up helping normal people as opposed to the top 1%, so that isn't even a decent argument now.

I personally think the economy is getting trashed on purpose to bring in a different system as the current one is fucked. As a pp has said, its the last minute looting by the wealthy. Then they will then fight each other for it all. I do think this winter is going be one of discontent. I think small busineses and services are a bit screwed as well as the average person. If this isn't on purpose, my God, I've never seen such incompetence! Hardly surprising since people in this party aren't experts in their field and play musical jobs every 5 minutes.

@WagathaChristieMystery Sunday Times is always good for in-depth pieces. I also follow trending discussions on Twitter.

Polling yesterday:

Westminster voting intention:

LAB 45% (+3)
CON: 33% (-2)

via @SavantaComRes, 7k sample
Chgs. w/ 11 Sep

Makes you wonder if the next couple of years are just going to be a government raid of the cupboards before being chucked out.

I think it’s a bit of both. Incompetence because they threw out all the decent tories/moderating voices from the Conservative party and ideology because KK is influenced by right-wing think-tanks/Brexit hard-liners.

Anyway KK has two choices, reverse some tax cuts (politically difficult) or allow BoE to raise interest rates.

No, we can't, Tory voters have dragged this country to hell, they can own the mess.
Tory voters cheered while we were taken out of the single market and customs union, making trade with our biggest market harder.
Again, cheered while the Tories put the fragile peace in NI in danger.
Tory austerity led to what...150,000 extra death? Their voters didn't care.
Tory voters believe the lie that the Tories manage the economy well despite all the evidence to the contrary.
Tory voters have watched the decline in the NHS and public services, continued to vote for them anyway.
Even if you only vote Tory because you think they're 'tough on immigration' how's that working out for you?
Tories cut police and justice service numbers to the bone practically legalising rape.
And as for the 'Tories know what a woman is' nonsense, all the advances into women's spaces , prisons (har, har as if Tories care about prisoners anyway) sports etc, they have all happened under a Tory government. Even self ID was a Tory idea.
And now the Tories have (again) tanked the pound. And for what? So they can give millionaires and extra £55,000 a year?
N
Tory voters need to look up from the fucking Daily Mail (my prediction, DM will ignore this and have a bit of Megan Markle hate on the front tomorrow) once in a while.
They can own their mess.

We were never in the EZ and rejoin only means we have a long term aim to join it, so thats irrelevant, as is how Germany gets its energy, we are also making plans to fire up cold power stations again.
Though with 3 months worth of gas stored, they'll do better than we will.

What isn't irrelevant is getting goods to/fro into the EU, as is proven with NI, their economy is doing well, GB on the other isn't.

However, rest easy (as your someone with no skin in the game) we wont be rejoining the EU, we wouldn't meet the fiscal rules nor would they accept a still divided UK.
Joining the SM is years away and again wont happen.

Bond yields up even higher, thats going to lead to further borrowing costs and further falls in £, markets don't see how uk will pay for this almost 2 trillion of debt we now have.

@Kendodd Yes Tory voters are like the Russian young men trying to flee ... all happy with the war in Ukraine.... until the war came knocking on their door.

They knew what they were voting for in 2019, they all saw how Bojo behaved, how he lied to the Queen, how he purged the tory party of decent MPs, the Islamophobia... but still voted for him.

Contemptable.

I wonder if the Bank of England will have to raise interest rates at an emergency meeting this week?

The BoE have to raise and keep raising interest rates quickly. Mortgage holders and renters (as landlords will put up rents to offset mortgage increase) will be clobbered.

It's kind of like that Father Ted episode where the plane is going to crash and there are two parachutes left, and Father Jack jumps out with one parachute strapped to his back and one strapped to a crate of booze.

I was just about to ask, when was it last this bad. That's worse than I thought!

I thought 1992 was pretty bad wasn't it? When we came off the gold standard. But clearly this is much worse.

Oh ignore that, it was to do with the ERM

This aged well
twitter.com/Kieron_Leslie/status/1574303863720808448?t=1Y6t_AiT7A4oPALHLqq3PQ&s=08

I assume in desperation the tories will announce a slew of lower earner tax cuts, but this fundamentally misundertands the british psyche, which prefers costed spending on public services over low taxes and shambolic services.

You can see Labour's confidence at their conference now. They used to be so timid.

Nope.

The current "plan" as I see it is:

1. Let high inflation erode public spending
2. Let high inflation erode non-linked public debt
3. Cut more public spending where possible.

Thats how they are going to make up for their tax reductions.

Kwasi has doubled down on his position over the weekend and said more tax cuts are to come!