The Intelligence from The Economist Gilt trip: Liz Truss’s hobbled leadership
Oct 13, 2022
Andrew Palmer, Britain editor for The Economist, dives into the turmoil plaguing the UK's new government following a disastrous mini-budget. He explains market reactions, including falling currency and rising bond prices, highlighting the Bank of England's swift moves to restore order. The conversation also touches on Cuba's economic crisis, where rising emigration reflects deep despair, and humorously explores the shift from manicured lawns to more biodiverse wildflower meadows, advocating for greener spaces and ecological awareness.
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Truss’s Economic Plan Fallout
- Liz Truss's economic plan, involving unfunded tax cuts, has destabilized UK markets.
- The pound plummeted, and bond prices fell, necessitating Bank of England intervention.
Mini-Budget's Double Impact
- The UK mini-budget created market uncertainty about lending risk to Britain.
- It also triggered issues with pension funds, forcing the Bank of England to intervene.
Bank of England's Temporary Fix
- The Bank of England's bond-buying program offered temporary market stability.
- Concerns remain about market reactions after the program ends, potentially damaging the bank's credibility.