Fiscal Fold? Truss May Blink On Taxes After Market Crash
Earlier this week, I wondered if the Bank of England might be attempting to enlist markets in an effort to compel a fiscal U-turn from Liz Truss.
Andrew Bailey's stern warning that the BoE's emergency support for UK bonds would end as scheduled on Friday despite the very real risk of ongoing turmoil and additional forced selling from pension funds, suggested Bailey either didn't appreciate the scope of the peril, or else had something else in mind.
"Bailey's comments were, in my eyes, gamesman
If this ends up bearing out it’s a true show of CB independence and backbone. Force the fiscal side to do the right thing instead of cleaning up the mess and making a bigger one in the process.
What is the reputation of the UK’s Office of Budget Responsibility (OBR)? Independent?
I don’t about ya’ll, but https://www.youtube.com/watch?v=_vJtt9PXPz8
After reading a bunch of UK news sources (not even tabloids), I have to wonder if Truss or Kwarteng will be around on 10/31 to present their budget.
Well, Kwarteng won’t be around on 10/31, or even on 10/15 . . . will Truss survive dumping her Exchequer, her high earners tax cut, and her corporations tax cut (or non-raise)? What poor sap will sign up as her next Exchequer, and what will that redshirt present on 10/31? Perhaps Truss will try to keep her other tax cuts and push out the budget presentation. If the markets won’t have that, BOE is in a strong position to wait her out.
Oops! Well that didn’t work, what’s up next?