‘Vastly overblown’: Brexit doom-mongering blown away – UK in better economic shape than EU

Fears about Britain’s economy are “vastly overblown”, with the UK faring better than the EU in many areas. Expert Ambrose Evans-Pritchard noted that Liz Truss’ Government “has no margin for economic error”, but added that “it is untrue that the UK faces urgent debt constraints”.

Mr Evans-Pritchard noted that the UK “has the second lowest ratio of public debt to GDP in the G7 at 88 percent (IMF data), lower than Canada (102 percent), France (113 percent), the US (126 percent), Italy (151 percent), and Japan (262 percent)”.

He then said: “It has the safety buffer of a longer debt maturity. It is also untrue this Government is pursuing a uniquely irresponsible fiscal policy.

“Until two weeks ago, the UK was the only G7 country pushing through rapid retrenchment so early after the pandemic, and the only raising taxes into a synchronised global downturn.

“Furthermore, the Chancellor has picked the right targets by cutting National Insurance and by cancelling a corporation tax rise that would have left us with one of the highest levels among OECD states.”

Writing for the Telegraph, Mr Evans-Pritchard claimed the “economic scare stories doing the rounds are greatly overblown”, referencing the gilts market.

The term gilt is often used informally to describe any bond that has a very low risk of default and a correspondingly low rate of return.

He said: “There is no run on the UK gilts market. The ten-year yield is 3.31 percent in the UK, 3.18 percent in Canada, and 3.58 percent in the US.

“Borrowing costs are lower in Europe – except Italy (4.21 percent) – but that is because core inflation is lower. The discrepancy has nothing to do with creditworthiness.”

The expert then claimed “there is no rupture of the pound either”, saying: “Sterling has had a rough few weeks but the Bank of England’s trade-weighted index is still higher than it was after the referendum.

“The salient story in the global exchange markets is the rise and rise of the over-mighty dollar. The UK faces difficult times but it is not an economic crisis and it is not in worse shape than Europe.

“Nor does it have higher inflation, contrary to what we are led to believe. The August tally was 9.9 percent in the UK and 10.1 percent in the EU.”

Over the weekend, it was reported Chancellor Kwasi Kwarteng is planning on getting rid of the EU’s cap on banker bonuses, as well as other legislation.

Tipped to make a fiscal announcement to the House of Commons on Friday, Mr Kwarteng will also reveal other plans, such as a tax cut of £30billion to help with the cost of living crisis and help economic growth, which the new Government wishes to grow at 2.5 percent a year.

Earlier this year, the Financial Services and Market Bill was introduced to Parliament under Boris Johnson’s Government, in a move which intended to revoke all “EU derived legislation”.

This could set in motion the mechanism for a replacement to Solvency II, an EU law which harmonised insurance regulation across all countries within the bloc, but may take years to pass through parliament.

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It comes after the Pound Sterling suffered its sharpest monthly fall against the US dollar since the Brexit referendum, falling 4.5 percent.

At the start of September, it traded just below $1.16, also fell nearly 3 percent against the Euro over the same period.

In a research note Wednesday, Capital Economics Chief UK Economist Paul Dales expected sterling to “plumb new depths” as political and economic uncertainty continue to hammer UK assets.

He said: “We think the pound will fall from $1.17 now to around $1.05 by the middle of next year.

That would leave it below the levels reached before the 1985 Plaza Accord ($1.09), after the UK left the ERM in 1992 ($1.43), during the 2008/09 Global Financial Crisis ($1.38), after the 2016 Brexit vote ($1.21) and during the 2020 COVID-19 crisis ($1.21).

“In fact, $1.05 would be an all-time record low. At the same time, with high inflation likely to prevent the Bank of England from cutting interest rates as soon as the financial markets anticipate, we expect only a small fall in 10-year gilt yields by the end of this year and a big decline in the FTSE 100.”

Meanwhile, Ms Truss admitted that Brexit Britain may not strike a free trade deal with the US for years.

Her comments came ahead of the Prime Minister’s first bilateral meeting with US President Joe Biden.

On the plane to the US, Ms Truss admitted to reporters: “There aren’t currently any negotiations taking place with the US and I don’t have any expectation that those are going to start in the short to medium term.”

Instead, the Prime Minister’s said her priorities would be joining the trans-Pacific trading partnership of 11 countries, including Australia, Canada and Singapore, as well as striking deals with the Gulf States and India.

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  • 11 часов, 27 минут назад 03.10.2022Politics
    Iran’s supreme leader breaks silence on protests, blames U.S.

    Iran’s supreme leader Ayatollah Ali Khamenei responded publicly on Monday to the biggest protests in Iran in years, breaking weeks of silence to condemn what he called “rioting” and accuse the U.S. and Israel of planning the protests.

    Khamenei said he was “heartbroken” by the death of 22-year-old Mahsa Amini in the custody of Iran’s morality police, which set off the nationwide protests. However, he sharply condemned the protests as a foreign plot to destabilize Iran, echoing authorities’ previous comments.

    “This rioting was planned,” he told a cadre of police students in Tehran. “These riots and insecurities were designed by America and the Zionist regime, and their employees.”

    He described scenes of protestors ripping off their state-mandated headscarves and setting fire to mosques, banks and police cars as “not normal” and “unnatural.”

    His comments come as nationwide protests sparked by Amini’s death entered a third week despite the government’s efforts to crack down.

    Iran’s state TV has reported the death toll from violent clashes between protesters and the security officers could be as high as 41, without providing details. Rights groups have given higher death tallies, with London-based Amnesty International saying it has identified 52 victims, including five women and at least five children.

    An untold number of people have been apprehended, with local officials reporting at least 1,500 arrests.

    Authorities have repeatedly blamed foreign countries and exiled opposition groups for fanning the unrest, without providing evidence.

    The protests over Amini’s death have tapped into a deep well of grievances in Iran, including the country’s surging prices, high unemployment, social restrictions and political repression. Demonstrations have continued in Tehran and far-flung provinces even as authorities have restricted internet access to the outside world and blocked social media apps.

    As the new academic year began this week, students gathered in protest at universities across Iran, according to videos widely shared on social media, chanting slogans against the government and denouncing security forces’ clampdown on demonstrators.

    Universities in major cities including Isfahan in central Iran, Mashhad in the northeast and Kermanshah in the west have held protests featuring crowds of students clapping, chanting and burning state-mandated headscarves.

    “Don’t call it a protest, it’s a revolution now,” shouted students at Shahid Beheshti University in the capital of Tehran, as women took off their hijabs and set them alight, in protest over Iran’s law requiring women to cover their hair.

    “Students are awake, they hate the leadership!” chanted crowds of students at the University of Mazandaran in the country’s north.

  • 1 день, 8 часов назад 02.10.2022Politics
    Labour’s Emily Thornberry apologises after her own photo shows her speeding at 81mph

    Emily Thornberry has been caught red-handed speeding at 81 miles an hour in a picture which the Labour frontbencher shared on social media. The MP for Islington South and Finsbury MP posted the picture on her Instagram account as she travelled to the party’s annual conference in Liverpool last week.

    The Shadow Attorney General, whose husband is a High Court judge, commented: “On my way to Labour Conference.”

    She also explained that she was ‘choosing a Labour Students disco playlist’.

    The photograph was taken by a passenger in the rear of the vehicle, with Ms Thornberry, wearing sunglasses and a brown coat, behind the wheel of the Toyota Prius.

    The car’s digital dashboard shows its speed as being 81 piles per hour at the time.

    In a statement issued last night, a spokesman for Ms Thornberry said: “She is well aware that the speed limits are set where they are for a reason, and she apologises unreservedly for this fleeting and totally unwitting moment when she exceeded them on the drive to Liverpool.”

    The speed limit on motorways and dual carriageways has been 70mph since 1965, and is currently 60mph on all other roads.

    In accordance with government guidelines, motorists who travel at speeds of between 71 and 90mph on Britain’s roads are liable for a three-point penalty on their driving licences, with most police forces also imposing a £100 fine.

    As an alternative, drivers can opt to attend driving awareness course instead of accepting the points. Anyone who accrues 12 points on their licences is likely to be banned from the road for six months.

    Errol Taylor, chief executive of the Royal Society for the Prevention of Accidents, said motorway speed limits were “there for a good reason”.

    He explained: “At 80mph, the consequences will be a lot more serious if you crash.

    “The 80mph stopping distance is 400ft, which is 85ft further than if you are going at 70mph.

    “It is much harder to stop your car and avoid a crash if you are going at 80mph.”

    Mr Taylor added: “The faster you go, the less time you have to react and the force of the impact will be much more severe.

    “You are at a vastly higher risk of death or serious injury.

    “Also, fuel consumption is 25 per cent higher at 80mph compared to 70.”

    One person who is not necessarily a big fan of current speed limits is Prime Minister Liz Truss.

    During the course of her successful campaign to be elected Tory leader, she was quizzed at a hustings event by one audience member who said: “Smart motorways kill. They also cause long delays because they close lanes off when there’s a breakdown.

    “They also often impose very low speed limits, mandatory ones, much lower than necessary, so will you restore hard shoulders to all motorways and in the meantime will you change the speed limit from mandatory to advisory?”

    Ms Truss replied: “On speed limits, we need to be prepared to look at that … I can’t give you a precise answer.”

    Addressing the issue of smart motorways, which seek to regulate traffic by varying speed limits, she continued: “I absolutely think that we need to review them and stop them if they are not working as soon as possible.

    “And all the evidence I have suggests they’re not working. We need to be prepared to look at that.

    “I do believe that the smart motorways experiment hasn’t worked.”

  • 1 день, 8 часов назад 02.10.2022Politics
    Truss crisis as poll shows under-45s think Starmer’s Labour is more patriotic than Tories

    Sir Keir Starmer’s strategy of playing the National Anthem at the start of the Labour conference appears to have paid dividends with new polling showing that under-45s now believe his party is now “more patriotic” than the Conservatives. With the Tory conference starting today, the polling by Techne UK provides an alarming picture of Labour closing the gap on an area which has been a strength for Liz Truss’ party.

    According to the survey of 1,624 UK voters over 28 and 29 September, 40 percent think the Conservatives are the most patriotic just five points ahead of Labour on 35 percent.

    But the picture in the latest Techne UK poll gets better for Sir Keir in terms of a turnaround on the issue with all age groups under 45 with Labour leading in each category.

    In 18 to 34-year-olds Labour has a 37 to 32-point lead as the most patriotic over the Tories, and in 35 to 44-year-old it is ahead by 38 to 31 percent.

    Even 45 to 54-year-olds category it is almost even with the Tories on 40 percent to Labour’s 39 percent.

    The polling underlines how far Labour have gone since the 2019 election and appears to vindicate Sir Keir’s decision to sing God Save the King at the start of Labour’s conference.

    It could also be a key factor in winning back Red Wall seats which flipped to the Tories in 2019 amid a perception that Labour was unpatriotic.

    The findings show a massive improvement for Labour from the days under Jeremy Corbyn’s leadership where polls had them as “unpatriotic.”

    Lord Ashcroft surveyed former Labour voters after the 2019 defeat and found Corbyn’s lack of patriotism was a key factor especially in an election where Labour was pushing for a second Brexit referendum.

    In his report Ashcroft said: “Though a few saw good intentions, former Labour voters in our groups lamented what they saw as his weakness, indecision, lack of patriotism, apparent terrorist sympathies, failure to deal with antisemitism, outdated and excessively left-wing worldview, and obvious unsuitability to lead the country.”

    The change of tack was signalled over the summer when shadow Cabinet member Lucy Powell, a key ally of Starmer’s, insisted that Labour is “the true party of patriotism”.

    She said: “Being patriotic isn’t something that Labour has always looked comfortable with.”

    “But progressive politics has been at its most successful and transformational when it captures the best of British values, nurtures our world-famous institutions and instils a belief that our best days lie ahead of us, not just in the past.

    “A quick survey across British politics today tells us that it’s not the Conservative party which enshrines these patriotic principles but Labour.”

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    However, the poll by Techne UK suggests that different voters have different definitions of patriotism with 66 percent of Leave voters describing the Conservatives as more patriotic and 63 percent of Remain voters saying it is Labour.

    Tory Ashfield MP Lee Anderson, who is a former Labour Party activist, said that his ex-party has simply put on a false veneer on patriotism.

    He said: “If you looked carefully there were Labour members walking out when the national anthem was sung. They are not patriotic at all.

    “But in the end, Labour can clutch at straws with patriotism but it is the money in people’s pockets which will decide the next election.

    “People are grumpy at the moment but when they feel the effects of the tax cuts and other policies it will be different.”

  • 1 день, 8 часов назад 02.10.2022Politics
    Liz Truss ‘sacked top official at the Treasury after he froze her out’ with Philip Hammond

    Liz Truss sacked a top official at the Treasury after he “froze her out” with former Chancellor Philip Hammond, an insider has claimed. Tom Scholar previously served as the permanent secretary at the Treasury. He was removed from the position when Liz Truss became Prime Minister in September 2022.

    Speaking about the reasoning for his departure, a Number 10 insider told the Times: “When Liz was No 2 in the Treasury she opposed Philip Hammond’s tax hikes and he and Scholar effectively froze her out. She was cut out of the loop on budget decisions.”

    They also said that he faced criticism for not focussing on policy.

    The insider said: “Tom’s big focus wasn’t actually policy, it was liaising with the Bank and external markets and making sure the subterranean pipework of the system was working

    “That is precisely what has gone wrong this week.”

    The final reason, they said, was that “Kwasi couldn’t handle how the rules were bent to help Scholar work from home.”

    The revelations about the Treasury’s private secretary come as the department faces criticism over its latest policy announcements.

    The Government announced a swathe of tax cuts last week, including cutting the basic rate of income tax from 20 to 19 percent and abolishing the 45 percent top rate of tax.

    The planned corporation tax increase, which was set to rise from 19 percent to 25 percent, will also be axed.

    Meanwhile, stamp duty will be cut for homebuyers.

    In the wake of the announcement, the pound fell to a record low against the dollar. And on Monday morning, borrowing costs reached their highest levels since August 2008.

    Earlier this week, the Bank of England was forced to intervene over a “material risk” to the UK economy and it announced it will start buying bonds in order to stabilise what it described as “dysfunctional markets”.

    The Labour Party held a record lead in the polls earlier this week.

    The YouGov poll, based on a survey of 1,712 voters on 28 and 29 September, presented a damning picture for the Conservatives, with Labour taking a 33-point lead.

    According to the Times, Treasury insiders warned Ms Truss that her announcements would bring a “big risk”.

    They said: “Senior Treasury officials made clear there was a big risk. The cabinet secretary [Simon Case] made it clear that there was a huge risk.

    “You can do what you said in the leadership election — reverse the national insurance rise and stop the corporation tax rise — but once you get into further tax cuts you have to have someone mark your homework.”

    An insider added: “She was told, ‘Don’t do this, no one will like it.’ And her attitude was basically, ‘I don’t care’.”

  • 1 день, 8 часов назад 02.10.2022Politics
    Liz Truss rips up more EU red tape to invigorate economic boom and free 40,000 businesses

    Liz Truss has announced she will tear up more EU red tape to allow British business to boom and take advantage of Brexit freedoms. The Prime Minister and her Business secretary Jacob Rees-Mogg have announced that they are to redefine the term “small business” freeing 40,000 businesses from burdensome paperwork.

    The move was only made possible because Britain has left the control of the EU and will mean that any company with fewer than 500 employees can now be designated as a small business.

    Previously, the definition applied to those with between 50 and 249 employees and it set a low bar deterring companies from growing and creating more jobs.

    The announcement comes after last week’s mini-budget which launched a new growth strategy with the aim of making the British economy grow by at least 2.5 percent a year.

    Ms Truss has vowed to “get Britain moving” – the slogan of this year’s party conference in Birmingham – and end years of Brussel-led stagnation and needless regulation.

    She said: “By raising the definition of a small business, in terms of regulation, from 250 to 500 employees, we will be releasing 40,000 more businesses from red tape.

    “That will make it easier for them to get on with their business, in turn boosting our economy and creating more jobs to help get Britain moving.

    “Higher economic growth means higher wages, better jobs, and more funding for our public services and NHS”.

    The change of the rule comes in tomorrow and was one of the major items identified by Mr Rees-Mogg when he was Brexit Opportunities minister in Boris Johnson’s government.

    The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses.

    Regulatory exemptions were often granted for small businesses, which the EU defines as below 250 employees.

    However, the UK is now free to take its own approach and exempt more businesses to those with under 500 employees.

    The changed threshold will apply to all new regulations under development as well as those under current and future review, including retained EU laws.

    The Government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1000 employees, once the impact on the current extension is known.

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    This is the first step in a package of reforms to ensure UK business regulation works for the UK economy.

    The reforms will harness the freedoms the UK has since leaving the EU to remove bureaucratic and burdensome regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money.

    Mr Rees-Mogg said: “Our enterprising medium-sized businesses are being buried in pointless paperwork, preventing them from reaching their world-leading potential.

    “That is why we are cutting red tape, starting with preventing unnecessary future regulations for these companies.

    “We are harnessing the freedoms the UK has since leaving the EU, removing bureaucratic and burdensome regulations on businesses, and taking steps to create a dynamic, growth-led economy.”

  • 1 день, 10 часов назад 02.10.2022Politics
    Rees-Mogg protected by police as screaming protesters pursue him at Tory conference

    Jacob Rees-Mogg was targeted by a protester at the Conservative Party Conference, taking place this week in Birmingham. Police were forced to intervene in the incident, escorting the Conservative MP through the conference centre. The incident occurred as he was leaving the ICC, where the conference is being held.

    He is thought to have been heading back to the Hyatt Hotel, where most Conservative MPs are staying.

    Protesters were heard booing, while many shouted: “You’re not welcome here”, “Tories out” and “shame on you!”.

    The incident comes amid wider unrest over the Conservative party’s economic policies and the cost of living crisis.

    Over the weekend, the country was rocked by demonstrations, with hundreds of thousands of people across the UK calling for the Government to do more to help with spiralling bills.

    Campaign group Enough is Enough organised rallies in 50 different towns and cities across the country yesterday.

    Protests took place in Manchester, Leeds, Birmingham, Newcastle, Ellesmere Port, Preston, London and Sheffield.

    Campaign Group Enough is Enough wrote on its official Instagram account: “It’s time to say #EnoughlsEnough. No to handouts for the rich and hardship for the rest.

    “This Saturday, October 1st, we’ll be protesting in 50 cities and towns across Britain.”

    Thousands of people in Manchester marched to demand the Government take action against the ongoing cost of living crisis, with many of them shouting “never trust a Tory”.

    Meanwhile, hundreds of protesters also took to the streets of Norwich, with demonstrators holding signs which read “solidarity with the strikers” and “freeze profits not people”.

    The march joined up with The Communications Union and National Union of Rail, Maritime, and Transport Workers (RMT) before congregating outside Norwich Railway Station.

    Speaking about the strike, Janice Richardson, the East branch secretary of the Communications Workers Union, said: “Today’s been a really good turnout – RMT is on strike and postal workers are on strike and people have come down to support us.”

    More than 10,000 people also gathered at King’s Cross in London yesterday in solidarity with striking rail workers.

    Just 11 percent of rail services ran yesterday as a result of a 24-hour walkout staged by members of four trade unions.

    The latest strike by members of RMT, Aslef, Unite and the Transport Salaried Staffs’ Association (TSSA) is expected to cause the worst rail disruption of the year so far.

    People across the country also set fire to energy bills yesterday as a symbolic act of protest against rising prices.

    This came on the day the government’s £150bn energy price guarantee came into effect, which allows average household bills to hit £2,500 a year, up from £1,971.

    The symbolic act was organised by Don’t Pay UK, a movement calling on people to cancel their direct debits unless the government does more to protect the poorest families.

    Don’t Pay ran events in 18 towns and cities, alongside the protests held by Enough is Enough and other organisations.

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Politics 'Vastly overblown': Brexit doom-mongering blown away - UK in better economic shape than EU