Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’
Massive tax cuts. A huge budget deficit. And a wild dash for growth, stoking a short-lived boom, before it all ends in a spectacular crash. As the new government unveiled the widest ranging tax cuts since the 1980s, along with a huge increase in the budget deficit, City commentators and the wiser sort of newspaper
In the end, it could have been worse. The Federal Reserve might have followed Sweden’s lead, with a whole one point rise in interest rates, or it could have even decided to short-circuit the whole process and go straight for a 1.5 per cent increase. Instead, it opted for the safer course, imposing a 0.75
Critics say that scrapping the cap on bankers’ bonus will encourage a return to excessive risk taking. It will provoke retaliation from the European Union, they warn. And perhaps, worst of all, it could prove fatal politically, rewarding a few rich Tory friends while the rest of the country struggles with the cost-of-living crisis. Chancellor Kwasi
Whacking up the price of black ties given the extra demand. Running advertising campaigns for cut price comfort food to get the nation through a painful few days. Or putting your zero hours workers on call for the whole of Monday just in case they are needed, while rushing out a quick line of over-priced
Oil prices have been falling steeply, reducing prices at the pumps. Wheat prices have dropped as supplies from Ukraine start to hit the world market again. And supply chains are steadily getting back to normal as trade routes recover from the pandemic, with shipping costs back down to their level at the start of the
It will be expensive. It will last far longer than anyone expects. And it will distort the market even more than it already is. Barring a major upset, Liz Truss will move into No. 10 Downing Street later today. Once she’s there, Britain’s new prime minister will have little choice but to take control of soaring energy
There will be a run on sterling. The gilts market will be in freefall. And the FTSE will tumble as global investors take fright and sell off every form of British asset. It might take only a few days, or the government might stagger through until the end of September, but before long Liz Truss
This time it was surely all over. As inflation started to rise towards a 40-year high, as central banks started raising interest rates for the first time in more than a decade, and as the monetary printing presses finally stopped running, the crypto-currencies crashed. What a crash it was. Bitcoin, the best-known crypto, fell all
This time it was surely all over. As inflation started to rise towards a 40-year high, as central banks started raising interest rates for the first time in more than a decade, and as the monetary printing presses finally stopped running, the cryptocurrencies crashed. What a crash it was. Bitcoin, the best-known crypto, fell all
It would be an ‘electoral suicide note’. It would condemn the party to ‘the impotent oblivion of opposition’. And it would push petrol prices up to eight quid a litre, and mean the electricity grid would have to be turned off at eight every evening to preserve power. Okay, okay, I made the last two
It turns out there is nothing like getting your homework marked by a tough new teacher to make everyone concentrate a little harder. Over the last couple of weeks of her campaign to lead the Conservative party, Liz Truss has made one point again and again. The Bank of England has been far too relaxed
Rishi Sunak’s promises on tax are lacklustre. He’s announced a fiddly one-off tax break on energy that will last for just a year which hardly anyone will notice due to inflation. There’s also income tax cuts up to seven years in the future, even though he is hardly likely to be Prime Minister by then (and he seldom
A tweak to the landfill tax perhaps? A minor adjustment to the airport levy? Rishi Sunak no doubt stayed up late into the night sifting through all the most minor tax cuts he could offer before re-launching his campaign with a dramatic u-turn. In the end, he plumped for axing VAT on energy bills, promising
Queues stretching back for several hours. Children going crazy in the back seat. Cars breaking down in the heat, and holidays thrown into chaos by delays at the terminal. Anyone who imagined that they were making their lives easier by avoiding the airports and driving to continental Europe this summer will have had a nasty
A reforming prime minister has been ousted by a fractious, divided parliament. The central bank is raising interest rates to try and stem inflation that is running out of control. Everyone is being urged to use as little electricity as possible as officials scramble around to secure enough energy, and the currency is crumbling as
Wages are rising. The economy is growing. The stock market is on the way up, and exports are booming. As he prepares for a long summer trying to persuade the membership of the Conservative party to make him prime minister, Rishi Sunak probably wishes he could be transported to some parallel universe where he could
He has the widest support among MPs. He easily beats any other candidate with the voters, and is the only one consistently ahead of Sir Kier Starmer in the polls. He has experience, a fluent manner on TV, and as his slick campaign has reminded everyone, he is the most professional campaigner among the politicians
Three, five, or perhaps even ten whole minutes. In a more civilised, parallel universe, perhaps Europe’s big wigs would have allowed a slightly more dignified period of silence following Boris Johnson’s resignation speech before cracking open the foie gras and champagne. In this one, however, the gloating started immediately. ‘The departure of Boris Johnson opens
Rishi Sunak’s resignation was, without question, a brave, honourable and dignified decision. By stepping away from the cabinet, the Chancellor Rishi Sunak may well have done enough to salvage his reputation among Conservative MPs and party members. Perhaps he might even have rescued what was once seen as a potentially meteoric career. But although he may
The Soviet Union had only just collapsed. John Major was still a relatively fresh-faced Prime Minister. And the internet consisted of a few desktop computers linking together a handful of laboratories. The world was a very different place when Germany last posted a trade deficit way back in 1991. But on Monday, the country recorded
