Liz Truss Economics ??? - Couldn't even pass 1st year junior school exam !!!

The time Liz Truss insisted her economic plans were not doomed to fail

Nadine Batchelor-Hunt
28 September 2022, 3:47 pm



Liz Truss has been noticeably quiet since her chancellor delivered a "fiscal event" on Friday that saw the pound tank, markets panic, a warning from the International Monetary Fund and emergency action from the Bank of England.

It came less than three weeks after Truss won the Tory leadership contest at the beginning of September and became prime minister.

Throughout two months of campaigning she repeatedly pledged to "challenge Treasury orthodoxy" and kickstart the UK's anaemic economic growth by implementing huge tax cuts that many criticised as uncosted.

Read more: Pound falls further in value against US dollar - slumping 1.5% to $1.0570

Her economic policies became the key dividing line between her former chancellor Rishi Sunak - who ruled out unfunded tax cuts warning it would make inflation worse and send interest rates soaring.

"Your own economic adviser has said that [your tax cuts] would lead to mortgage rates, interest rates going up to 7%," Sunak said at an ITV leaders' debate in July.

"Can you imagine what that's going to do for everyone here, and for everyone watching? That's thousands of pounds on their mortgage bill.

"[It's] going to tip millions of people into misery. And it's going to mean we absolutely have no chance of winning the next election."
Truss, however, defiantly accused Sunak of talking down the UK

"I don’t believe in this negative, declinist language", she said. "I have lots of economists that are backing my plans."

When approached by Yahoo News UK to identify the economists who had backed her plans, Truss' team has yet to respond.

Among the economic bombshell the government announced on Friday, was:

• a cut to the top rate of tax, from 45p to 40p at a cost £6bn per year;
  
  
• a cut of the basic rate of tax from 20p to 19p at a cost of £5 billion per year;
  
  
• reversing the corporation tax hike pledge back to 19% from 25% at a cost of £17bn per year; and
  
  
• reversing the 1.5% national insurance hike at a cost of £12bn per year
  

Read more: IMF urges Truss to reverse top rate tax cut in rare intervention

As the markets reacted - and the pound slumped - senior economists have since lined up to criticise the plans.

One of the most notable comments came from Danny Blanchflower, who previously sat on the Bank of England’s monetary policy committee for three years. He said Truss and Kwarteng's credibility was now "completely trashed". He added: "I've never seen such raging incompetence."

Institutions have also stepped in.

The IMF made an unprecedented intervention on Tuesday, warning the UK government to veer away from its trajectory.

"Given the elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy," the IMF said on Tuesday.

"Furthermore, the nature of the UK measures will likely increase inequality."

Elsewhere, the UK's stock and bond markets have lost around $500bn since the prime minister took office just over three weeks ago amid tanking investing confidence due to the government's economic strategy.

And on Wednesday afternoon, the pound slumped again to 1.057% after the Bank of England announced emergency action and said it would buy government bonds to help stabilise the market.

However, the government has doubled down on their strategy.

Financial secretary Andrew Griffith told Sky News late on Wednesday afternoon: “We think they are the right plans because those plans make our economy competitive.”

He added: “Get on and deliver that plan. That’s what I, the chancellor and my colleagues in government are focused on is getting on and delivering that growth.

 

Bring it on, the sooner the better !!!

 

For the Fiscall Watchdog to visit Downing street is serious stuff.

Thats like the Headmaster having to summon certain Math class members to pull their socks up
Truss and Kwarteng to meet fiscal watchdog today after MPs demand full economic forecast

 

Pity they don't have the authority to expel the Treasury idiots !!!

 

Perhaps cant expel but criticism is bound to follow if serious miscalculations are found which will damage the Tories standings further

 

Didn't Boris, May & Cameron all lie too and they survived after doing so.

 

Sure but they are all now Ex Pms and Truss will be joining them

Also Labour havnt enjoyed this size of lead in the polls since the waiting Blair administration in the 90s .

The future will be red

 

Absolutely !!! - then we can become the People's Republic of England, abolish the House of Lords and Charles the turd go float his boat in the Caribbean

 

Nah, we'll send him to Jamaica - which is about to declare itself a Republic !!!