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Truss wasn’t ‘aware’ because she ignored the warnings that she received. Why hasn’t the same thing happened under Labour? For various reasons, (not least that

by foldr 1y ago

Truss wasn’t ‘aware’ because she ignored the warnings that she received. Why hasn’t the same thing happened under Labour? For various reasons, (not least that their economic policy isn’t stark raving bonkers), but largely because they’ve taken very explicit care to reassure the markets and make sure that no-one is surprised or alarmed: https://www.theguardian.com/uk-news/2024/oct/18/infrastructure-taskforce-to-help-chancellor-avoid-financial-sector-turmoil https://www.theguardian.com/uk-news/2024/oct/18/infrastructu...

qcnguy 1y ago
She wasn't given any warnings about the LDI crisis, by universal consensus. She has also written about how the the first thing anyone told her about the risk buildup in the pension sector was the moment it happened. Same thing hasn't happened under Labour because steps were quickly taken to end the crisis in the pensions sector. But the underlying problem remains that high spending isn't viable forever. FWIW, Labour's economic policy is much worse than Truss' ever was. UK is heading for a massive crisis that makes the mini-budget LDI blowup look like a storm in a teacup. Labour have not only not reassured the market, they are actively antagonizing it as can be seen in the yields that are now persistently higher than during Truss. Labour backbenchers won't let the UK cut spending and bondholders are starting to think they won't get their money back. They are right to worry.
- foldr 1y ago
  Lots of people told Liz Truss that the budget would lead to a crisis in confidence in the markets. Even more people would have told her if she hasn’t decided to go ahead without an OBR assessment. Whether or not someone was able to foresee the exact specifics is irrelevant. Everyone who knew anything knew that the budget would have catastrophic consequences. You don’t have to like Labour’s economic policy, but it’s rather a weak argument to insist that it will eventually lead to an even bigger crisis that the Truss-induced crisis that has actually happened. So far it hasn’t. Isn’t economic policy essentially the art of delaying crises, in any case?

by foldr 1y ago

qcnguy 1y ago

She wasn't given any warnings about the LDI crisis, by universal consensus. She has also written about how the the first thing anyone told her about the risk buildup in the pension sector was the moment it happened. Same thing hasn't happened under Labour because steps were quickly taken to end the crisis in the pensions sector. But the underlying problem remains that high spending isn't viable forever. FWIW, Labour's economic policy is much worse than Truss' ever was. UK is heading for a massive crisis that makes the mini-budget LDI blowup look like a storm in a teacup. Labour have not only not reassured the market, they are actively antagonizing it as can be seen in the yields that are now persistently higher than during Truss. Labour backbenchers won't let the UK cut spending and bondholders are starting to think they won't get their money back. They are right to worry.

foldr 1y ago
Lots of people told Liz Truss that the budget would lead to a crisis in confidence in the markets. Even more people would have told her if she hasn’t decided to go ahead without an OBR assessment. Whether or not someone was able to foresee the exact specifics is irrelevant. Everyone who knew anything knew that the budget would have catastrophic consequences. You don’t have to like Labour’s economic policy, but it’s rather a weak argument to insist that it will eventually lead to an even bigger crisis that the Truss-induced crisis that has actually happened. So far it hasn’t. Isn’t economic policy essentially the art of delaying crises, in any case?