Can someone explain in laymans terms what is happening with the BOE/pension funds on Friday?

Just watching it just now. Reverse on corporation tax, "control the size of the state", "spending will grow less rapidly than previously planned".

She's still utterly convinced that she's right, imo

Yep

There were a few posts re end of pensions this week but it looks we’ve passed the deadline and it hasn’t been that bad

Not sure we'd know yet tbh. And even if they're a bit better right now, any more scary behaviour could tip them over again.

Hunt is never likely to be a serious candidate for the Tory leadership, having failed twice so he probably looks both serious and established, without being a rival.

I think until Truss reverses more tax cuts and resigns, we're not out of the woods. The level of unfunded tax cuts is still too large. Gilts sold off today when it became clear that all she was u-turning on was corporation tax. The 30 year Gilt yield ended the day at nearly 4.9%. This is around the level which provoked the first spate of LDI unwinds and subsequent BoE intervention. I wouldn't be surprised to see it hit 5% or higher on Monday with no BoE support. Let's wait and see!

It's a case of "well, she would say that, wouldn't she".

Truss has to keep going until she can't keep going. She probably already knows she's toast. She's clinging onto some flotsam in the ocean, she's got rid of her excess baggage not needed on voyage, and hoping to survive, but the chances of that are very limited. Out of her depth.

James O'Brian has a good analogy for how LT has dealt with the unfunded tax cuts. It's like a husband saying to his wife "I just bought us a new Porsche" and when the wife says "Jeeeez, how are we going to manage the repayments?!?!" he says "don't worry, darling, it'll be fine, I've bought us a Lamborghini as well". LT's response to "how the hell is the country going to afford all the unfounded tax cuts?" Is to repeat like a broken record "don't worry, it'll be fine, we're saving people from paying £6,000 energy bills".

I think we need a GE to get out of the woods. Another Tory deposition/coronation is just more instability.

They've had twelve years, they've fucked it up, it's time the country had their say.

There was a good person the other day saying we are being judged by the markets now and it will continue - the best thing is no risky moves.

A GE is a big move so we’d have to be sure the markets don’t just think U.K. more instability. No one knows what would happen if a GE was called.

If a GE causes further reaction we really are in trouble as no where to go.

I agree she needs to u turn further. I suspect the corporation tax cut (or cancelled rise) was possibly the least market scaring element tbh

@MarshaBradyo Agree a General Election wouldn't be ideal, although I'm not sure it would introduce that much uncertainty... surely Labour are a dead cert for a GE win.

I just wish we could get ourselves in order. I keep coming back to Truss/Kwarteng's decision to announce bazooka tax cuts as the world is heading into an inflationary recession. It's so mad I am still bewildered by it. The more I think about it, the more I can't fathom how they were so blind to the consequences. What were they thinking?!

@StatisticallyChallenged Agree more u turning is necessary to turn this around. I wonder how much this little experiment in economic unorthodoxy has cost us in borrowing costs. I'm sure someone somewhere will do the maths, but the figure must be colossal.

I listened to Hunt this morning and although initially I inwardly groaned on hearing his take up (due to pro lockdown stance in pandemic) he was actually saying things I’m glad to hear,

Taxes will go up a bit, spending down - go back to basics and make the numbers match

A GE would usually be an unstable thing in terms of markets reaction, so would the prospect of a Labour Government, but isn’t there now a role reversal with Captain Sensible and his team ready to go on one side and the absolute chaos of a new chancellor every month with incoherent policies on the other? GE the only way to go to get out of mess.

If it’s announced quick enough…but surely just dragging on waiting for the inevitable makes escalating damage worse.

I'm inclined to agree, a GE would normally be destabilising but right now Mr Dull seems more like Mr Safe, and Rachel Reeves looks like a fairly stable pair of hands comparatively. Given the state of the economy I don't see even Labour trying to go to the polls with a spend spend spend type manifesto.

A GE is not immediate it takes campaigning and time out to get there - again.

Plus Labour face the same issues when they get in, there’s no more borrowing and tax too high has issues

Imo Hunt does his stabilising statement which is coming up - show the needed fiscal responsibility

I’m sure Labour will win when they go for it at a better time, after we restore stability. It is recoverable

It's a mess - by firing interest rates up so high they're going to inhibit growth. Bond issuance is already through the floor this year, this will just make it worse.

I was pondering to DP (who may or may not have been listening) that the Sunday papers have a lot of stories to run, should they choose to, about the alleged private lives lives of these jokers, including Truss, Kwarteng and Mordaunt. They've got files on everyone and run the stories when they want to. If minnows like me are aware of some of them, they're very much 'open secret' stuff in London.

So I was wondering whose character might be tradduced tomorrow?

As for why has this government done this bizarre, damaging and extraordinary monetary 'bazooka' explosion with the UK's financaes, as @Bookclub99 asked, the first jokey answer in my head was 'the Russians', with visions of a nuts James Bond plot swirling around in my head. And then I remembered Penny Mordaunt on TV lying about Turkey joining the EU, falsely saying we didn't have a veto, and effectively pushing along the narrative of people like Arron Banks (one of the self-styled 'bad boys of Brexit'). I feel like I'm losing the plot now, as if my matrix is faulty.

No more waiting. Just get on with a GE! It’s only going to get worse but at least there will be some kind of mandate. Truss and Hunt have 0.

.

Is that an iceberg I see before me?

"Quick, speed up and sail at it as fast as possible. If we hit it really really hard, it might bend to our will"

<Kwasi and Liz's economic approach>

If you want to echo Macbeth:

Tomorrow, and tomorrow, and tomorrow,
Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life’s but a walking shadow, a poor player,
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

@Vinniepolis and @Bookclub99 pension schemes are not in a huge mess and investment advisers shouldn’t be sued or sacked. LDI is a strategy to manage risk that has worked very well for 20 years. That in a market of slow (and manageable) rise in yields the then Chancellor announced a bonkers package which sent the markets into a spin that meant a rise (and then a spiralling rise) of increased calls on collateral is akin to people being angry that there aren’t enough snow ploughs and gritters in a once in 20 year snow storm. The circumstances are crazy, not the strategy.