Rishi Sunak was right and ahead of the game
AS one who supported the low tax, high growth ideals of Liz Truss, it pains me to say that Rishi Sunak was correct when he said in the summer that Truss’s policies were wrong.
Ironically, the UK’S recent abrupt change in policy of increased rather than lower taxation, is a policy that may soon be followed by other countries in Europe and beyond. Sunak was ahead of the game.
Privately, economists take economic modelling with a large pinch of salt. Unforeseen events mean all modelling forecast are subject to regular revisions.
Whatever he thought of of the OBR’S modelling privately, Kwasi Kwartang’s side lining of the OBR in his mini-budget was a serious political error. He was asking for trouble. This though, wasn’t the cause of his downfall.
Starting in March this year the US Federal Reserve began raising interest rates from 0.25% to 3.25%. This has destabilised global financial markets which did not anticipate these aggressive increases.
The Japanese Yen has fallen more than 30% against the dollar and highly indebted companies, such as Credit Suisse, have had difficulties refinancing. It appears the UK Pension industry was a victim of US interest policy and needed major financial assistance.
Incredibly, it appears the Bank of England only became aware of the scale of the problem on Monday 27 September.
I have read reports suggesting that a 2008, Lehmans Bros event could have happened had not decisive action been taken.
This crisis situation was evolving just as Kwartang was announcing more tax cuts.
Again, it seems incr edible that Kwartang appears not to have been aware of the magnitude of the developing crisis till the day before his dismissal. This, may I suggest, is the real reason he had to go. Similarly with Liz Truss. They were both hopelessly out of their depth. The financial position in the UK may now have stabilised.
The next key date is November 2 when the US Federal Reserve could again raise interest rates.
Some EU countries, such as the Baltic states with over 20% inflation rates, could then be at risk.
Even the Netherlands, with an inflation rate of over 17%, is at risk. Sadly, this problem is not over yet.
M. Judge, Coventry.
Parking chaos
I FEEL for parents complaining over the way some people park near schools at the busiest times.
I lived near a school once and it was a nightmare during drop off and pick up times with cars literally everywhere down the street.
Once someone even parked in my drive!
J. Smith,
Nuneaton.