Economy

He will control spending, reverse the few remaining tax cuts that are still in the works, and bring in every kind of official body imaginable to check over all the figures. Jeremy Hunt made the best of a very difficult hand of cards in his first outing as Chancellor on Saturday morning. He was calm, rational, sensible, and conciliatory. His strategy was clear enough. To calm the markets, and buy the government some breathing space while it figures out what to do next. There is a catch, however. What if it doesn’t work? Hunt’s real problem is that he has no plan for growth Hunt’s plans as Chancellor are clearly

After two major U-turns over last month’s mini-Budget and the sacking of a chancellor, what’s left of Liz Truss’s economic agenda? Parts of it remain intact. But it’s now shaping up to be significantly different from what the Prime Minister intended when she entered Downing Street. The key assumption behind Trussonomics as it was developed during the leadership race was that the markets would be delighted to lend to the government, on the cheap, to see through its tax-cutting, growth-stimulating agenda. That assumption was quickly killed off after former chancellor Kwasi Kwarteng sat down from presenting his mini-Budget, and the cost paid by governments to borrow began to soar. It

All financial crises have their peak days, the moment of drama when everything comes to a head. Think of Black Monday – 19 October 1987 – when the bottom fell out of global stock markets, or Black Wednesday – 16 September 1992 – when the pound crashed out of the Exchange Rate Mechanism. With the Bank of England saying that it will cease emergency purchases of gilts tomorrow (although it is reported to have told pension fund managers a different thing in private) could we be facing a Black Friday? Some things to look out for tomorrow morning…. Gilts crash (ie yields rise sharply)?  This afternoon, things have been going

Where next for house prices? Clearly, they’re going down as mortgage rates go up – and my forecast in May that they would shed ‘recent froth’ and then stagnate rather than plunge, has been entirely overtaken by events, or at least by Kwasi Kwarteng’s calamitous ‘fiscal event’ last month. Reverberations from the Chancellor’s debut continue apace, with more emergency bond-buying by the Bank of England despite news that the OBR-assessed forecast missing from his September speech will now be unveiled on 31 October instead of on 23 November. But even if the books can be cooked in a way that makes more sense than markets expect, hundreds of mortgage deals

Speculation has been growing that the Bank of England might announce an extension of its emergency gilt-buying programme which is set to end on Friday. Despite the Treasury moving forward its ‘medium-term fiscal plan’ announcements from November to the end of this month, gilt yields have been rising yet again this week in the lead-up to the end of the scheme. It seemed likely that the Bank’s gilt-buying programme might be extended for another two weeks as a result, in order to buy time before the Chancellor Kwasi Kwarteng’s announcement on 31 October. But tonight Andrew Bailey put that speculation to bed. Speaking at the Institute of International Finance in Washington DC, the

Production will be cut. Supplies to the rest of the world will be curbed. And inflation will rise just a little bit higher. No one ever expected the oil-cartel Opec(+), led by Saudi Arabia, to be friendly to the West, or to help out when it was needed. Even so, its decision this week to effectively side with Russia, and to make the energy crisis even worse, may quickly backfire. In reality, Opec was already in long-term decline. Picking a fight with the US will just make that worse. It was certainly the kind of news the energy markets didn’t need. Just as it was getting over the loss of Russia’s crucial

Liz Truss joins other European leaders in Prague today at the first meeting of the European Political Community. Truss’s presence is sensible, a reminder of Britain’s point that it left the EU, not Europe as a whole. It should also help relations with Emmanuel Macron given how much he has invested in this project. One of the subjects discussed will be energy. The conversation will focus on Putin’s weaponisation of energy and how to keep the lights on this winter. But the anti-Russian alliance has suffered a blow after the news that the Opec+ countries, which include Saudi Arabia and Russia, are going to cut oil production by two million