The New UK Sunak Government had steadied markets, but in coming weeks it will become increasingly clear the fractured Tories are trapped in no-Growth Austerity. Can they escape, or is it time for a Political Reset?
How do we fix the UK’s broken National Health Service? Don’t expect much from politicians – fixing the NHS is politically dangerous, might take decades, and is way beyond the time frame of the next election. It’s better to tinker, make some noise and do little. There are many reasons the NHS is effectively broken, but even more reasons to be hopeful it can be fixed – if we can just muster the vision and imagination to make it happen and use tech!
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 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.
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.
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.
As summer wends towards its end, a winter of populist discontent from left and right will make Europe increasingly fraxious. While the US economy will likely be on path to recovery – Europe will still be trending down.
Not an insightful Porridge this morning, but let me tell you a story about lessons learnt on holiday and what’s likely to dominate the news flow in August ahead of the September market!
Harry Hindsight is the world’s greatest market trader – he’s circling round the opportunities presented by inflation and the risks its presents. He’s short bonds, credit, stocks, Brexit and the UK.
Big theme for the week in UK politics will be the last act in The Tragedy of Boris Johnson. His likely denouement coincides with rising economic stress, increasing corporate defaults and doubts on sterling. Time to Panic? Not at all! Bring it on.. We’ve suffered worse!