The new Truss/Kwarteng grand plan to create a UK High Growth High Wage economy boils down to trickle-down economics, which simply don’t work. They won’t restore the economy, but they may, perversely, boost markets.
The Old Age is over, and its welcome to the new, which is going to be little different – just a lot more complex. Thriving in a confused new economy of energy scarcity, inflation, recession and geopolitical threat isn’t easy – as the UK is about to discover.
As London grieves we’re not paying much attention to politics and markets – but we should. The outlook is deteriorating. Confidence is declining and will likely get worse if the new government’s lack of awareness and sensitivity continues.
Stock markets may be crashing on inflation fears, but watch the Putin Xi summit in Samarkand tomorrow as the critical event this week. Is China prepared to reinforce Putin’s failure – and what does that mean in terms of risk?
The UK’s finances depend on how long energy security remains compromised, and whether the new Truss government can convince markets to fund that time.
This Elizabethan Age has ended. Queen Elizabeth was instrumental in establishing and strengthening the UK’s Soft-Power and global position on an increasingly confused global stage. It’s time to look to the future.
The news looks bleak. A cataclysm of gloom is set to sink Europe and the UK – but, maybe things aren’t as bad as we think. Good news and a realisation things can get better could stabilize sentiment, and build a recovery base. Maybe?
The new UK Premier has 5 days – tops – to establish her new government and put in place the strategies and policies to restore confidence in the UK economy. If not, the Virtuous Sovereign Trinity will fracture. It needs sound communication and clear grasp of the problems behind the crisis. Truss hasn’t demonstrated either – yet.
The last thing new UK premier Liz Truss will try to do is fix the NHS. Too difficult and an electoral minefield. It will get worse. But, tech and medical advances plus a bit of flair could give us a new NHS fit for purpose and ready for the next century. It will take will and imagination – which is unlikely to be found in the Department of Health or No 10.
The UK is at risk of breaking its “Virtuous Sovereign Trinity” of stable politics, currency and bond markets. Collapsing confidence in politics to stem the slide in sterling and thus Gilts, could see the UK stumble into a crippling Sovereign Financial crisis sooner than we think possible.
