2022 Oct 02 - Lizz Truss Starts as PM

It’s been quite a busy week or two for Liz Truss as she settles into the new job, new email account, testing out the coffee machine and discovering that HR is not in fact Human Resources, but High Risk, a department at the Bank of England. Interest rates are going to be going up which makes a change from the past few years where we actually saw zero-interest loans. Those are the ones named as such because people have zero interest in paying back the money, typically used to purchase buy-to-let properties or to set up an energy company that subsequently goes into receivership.

The cost of energy has stabilised to be fair, although it’s still cheaper to get burgled than to leave the lights on when you go out and if you want to keep your bills down, I’d suggest buying a paperweight to hold them in place. That’s about all the suggestions anyone has, other than maybe turn everything off and work from the office during the week, rather than the living room, or the veranda, or the local pub. I hear some people have been doing that, obviously not me though, in case anyone from work is listening.

If you look in the dictionary, a ‘truss’ is supposed to support things, not collapse them, so what is Liz Truss’ game plan with the economy? Rishi Sunak is busy re-evaluating that US Green Card he has and so the new Chancellor is Kwasi Kwarteng, who is certainly making good on a promise to eliminate stamp duty, mostly by eliminating the concept of buying a house any time soon. The current plan is a huge gamble on growth. Reduce taxes, blow up the deficit and hope that growth manages to pay for it, although with companies looking to escape the energy crisis in Europe, there’s a strong argument to be made for that policy. JP Morgan has recently looked at evacuating its Hamburg operations this winter and relocating trading to London, if the lights go out and Germany descends into a 3 day week. Numerous American companies have talked about expanding in the UK, especially now that those managers on a US salary would suddenly be getting paid 10% more thanks to recent moves on the currency market.

In many respects this is a little like the early 90s where a series of shock financial moves ultimately lead to a booming economy 3 or 4 years later. This assumes of course that the government can survive; In 1997, Tony Blair managed to swoop in at the last minute and claim that economic prize as his own although Keir Starmer is no Tony Blair. A competent opposition leader would be all over the news and seen by the public as a prime minister in waiting, but most people on the street would struggle to recognise him and what few interviews he has done have been lacking at best. He recently gave a fairly bad one where to test how on-pulse he was with working class people he was asked about the World Cup next month and wasn’t able to name a single England striker. Although to be fair that’s only one fewer than Gareth Southgate
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