Tako se je začelo:
“Chancellor of the Exchequer Kwasi Kwarteng last week set out an unfunded £45 billion tax giveaway, on top of an energy bill rescue plan costing over £100 billion across two years, with no details on how to balance the books. The plan sparked a run on the pound and sent market interest rates soaring.
Cuts to benefits, infrastructure projects and departmental spending totaling up to £47 billion ($52 billion) will be needed to bring the national debt under control, comparable to the austerity Osborne imposed during the financial crisis, the Resolution Foundation said. Bloomberg Economics projected the cuts may even need to exceed Osborne’s since borrowing costs have rocketed following the backlash against Truss’s package of tax cuts.”
“If there was no intervention today, gilt yields could have gone up to 7-8 per cent from 4.5 per cent this morning and in that situation around 90 per cent of UK pension funds would have run out of collateral… They would have been wiped out.” So says a UK bond trader yesterday.
A liquidity crisis erupted in British bond markets after the announcement by the new right-wing Conservative government that it would spend up to £60bn to maintain and energy price cap for householders for up to two years, subsidise business energy costs AND also cut corporate and income taxes. The total hit from this largesse (mainly to the rich) to the UK public debt level over the next few years has been estimated at over £400bn or nearly 20% of GDP. With UK public debt already at 100% of GDP, that sounded the death knell for the UK…
View original post 2,147 more words
DAMIJAN blog 