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.

What a mess. Kwasi Kwarteng’s Special Fiscal Operation failed to stabilise UK markets and has zero prospect of driving growth. The new government stumbled at the first jump. How bad will it get? What are the implications? Who is next for the Chancellor’s job?

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.

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.

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.

The outlook for the UK looks increasingly grim. There are few reasons to hope a new government can reverse the mounting consumer fears, stagflation and the growing sense of decline.

The pace of US CPI inflation moderated slightly, but it’s too early for the market to conclude rate hikes are over. There are many imbalances still to resolve – especially in consumer credit. Meanwhile, the new UK premier’s clumsy attempts to blame the BOE raise questions.

There are lots of outlooks and scenarios on the inflation threat: what if its longer and turns stagflationary, and just how much more destabilising would the fraxious global economy become?