The headlines could not be bleaker in terms of open political plots within Government and The Bank of England undermined internally and externally. This is how nations fall – this is not what the UK deserves.
The Bank of England averted a run on the UK’s investment institutions yesterday. Chancellor Kwarteng is unlikely to thank them for their calm competency and credibility. The Bank’s intervention has triggered a global rally as the market now expects more central bank support.
HSBC is being pilloried for comments made by its’ ESG head, but what he said is worthy of consideration. Overly emotional ESG is a distortion that may be as dangerous as climate change denial.
Central Banks and Politics will be the dominant theme this week/month/year. Politicians are anxious to show inflation and recession are not their fault. Blame Central Banks! The Politics of Blame has profound consequences for markets.
The UK is going through periodic angst as everything looks terrible and we wonder how to balance the budget, pay the bills and avoid penury. Relax. We worry too much. Everyone else is cooking their national accounts. The UK can do it better. Buying Boots at the Ready!
Central Banks are playing the “lower for longer” interest rate card to reassure markets on growth. There are always consequences of such actions – ranging from bubbles, delusion and fraud. Eventually consequences trigger change, and reassessment – which is driving the rotation from Hope as a Strategy Tech into Fundamental stocks – Autos are a good example.