Newslinks for Wednesday 28th September 2022

Date:

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IMF urges Truss to reverse tax cuts

“The International Monetary Fund has urged Liz Truss to reverse the decision to abolish the top rate of income tax, in a highly unusual attack on the economic policy of a G7 country. The world’s lender of last resort heaped pressure on Ms Truss and the Chancellor, as it urged Kwasi Kwarteng to use his fiscal plan in November to change course. The IMF said it was “closely monitoring recent economic developments in the UK and are engaged with the authorities” and warned that the fiscal stimulus risked undermining the Bank of England’s efforts to curb inflation. A spokesman for the Washington DC-based organisation said Mr Kwarteng’s announcement in November would “present an early opportunity for the UK Government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners”. It is an extremely rare intervention by the IMF over a developed country’s economic policy.” – Daily Telegraph

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  • IMF’s stinging rebuke is without a clear precedent – Faisal Islam, BBC
  • More mortgage lenders pull deals on rate rise fears – BBC
  • Treasury plans to help renters get mortgages as interest rates set to soar – Daily Telegraph
  • Kwarteng seeks to reassure City bosses and MPs over economic plan – Financial Times
  • Civil servants “warned against tax cuts” – The i
  • Is Britain now in a full-blown economic crisis? – Financial Times
  • Chancellor’s old boss Crispin Odey bets on pound falling further – The Times
  • Profile of Kwarteng – The Times
  • The Tories are haunted by the fear the 1990s are repeating themselves – Philip Johnston, The Times

>Today: Columnist Emily Carver: If Truss can’t overcome the Tory NIMBYs, her plan for growth is doomed

>Yesterday: Columnist James Frayne: Seven reasons this change of economic course is a big political mistake

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Starmer pledges to establish state energy company

“Keir Starmer pledged to establish a publicly owned energy company in his first year in office as he reflected Labour’s growing hope that the party is on the path back to power. In a conference speech that set out his vision for government, the Labour leader told delegates they must “spend each day” between now and the next election working to earn the trust of the British people, adding: “As in 1945, 1964, 1997, this is a Labour moment.” He said the Conservatives had “lost control of the British economy” and crashed the pound, not for the benefit of ordinary working people, but for tax cuts for the richest 1% in society.” – The Guardian

  • The speech ruled out working with the SNP. But not with the Lib Dems. – Daily Mail
  • Free breakfasts at primary school promised – BBC
  • Labour seem to believe simply not being Tories will hand them power – Leader, The Sun
  • He says that if elected he will not revisit Brexit, but harsh reality will draw him to the single market – Daniel Finkelstein, The Times
  • Labour has emerged from the obloquy and extremism of the Corbyn era – Leader, The Times
  • Conference has been a triumph of boredom – Madeline Grant, Daily Telegraph
  • The party’s change of tack – to preserving the Union – is revitalising it both in terms of morale and voter support in Scotland – Alan Cochrane, Daily Telegraph
  • Labour remains the party of class envy – Leader, Daily Telegraph

>Yesterday:

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Truss “resisted issuing statement to calm markets”

“Liz Truss initially resisted plans to issue an official statement to calm the markets when the pound fell to a record low after Kwasi Kwarteng’s tax-cutting budget. On Monday the Treasury and the Bank of England released apparently co-ordinated statements within minutes of each other after a day of market turmoil. However, Sky News disclosed that the prime minister had to be persuaded to do so during a discussion with Kwarteng. They decided that given the Bank’s planned statement the government should also release one. In it, Kwarteng committed the government to updating its fiscal rules and publishing a forecast from the Office for Budget Responsibility.” – The Times

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  • The PM’s “initial instinct had been to stand firm and say little or nothing” – Sam Coates, Sky News

Bank of England Governor accused of being “asleep on the job”

“Bank of England Governor Andrew Bailey has been ‘asleep on the job’ by allowing inflation to soar over the past year, MPs claimed yesterday. It came as the Bank’s top economist Huw Pill gave a clear signal of a large interest rate rise when its Monetary Policy Committee (MPC) next meets in November. His comments appeared to rule out an emergency meeting before then to increase the rate in a bid to calm the markets. But Tory MPs said dramatic increases were needed only after the Bank let inflation ‘bolt from the stable’ and allowed things to go ‘horrendously wrong’ last year.” – Daily Mail

  • Bailey’s muddled and flaccid responses to the growing financial crisis have seen the Bank of England Governor’s authority drain away – Alex Brummer, Daily Mail

House prices “could fall sharply”

“Mortgage providers have begun raising interest rates to levels not seen since the financial crisis as economists warned that growing borrowing costs would trigger a steep fall in house prices….Analysts at Credit Suisse warned that the combination of higher interest rates, inflation and the risk of recession could lead to house prices falling by between 10 and 15 per cent.” – The Times

  • Stamp duty “will be hit as 400,000 fewer houses sold” – The Times

Minford: Pay no attention to the idiots who cry “crisis”

“Nor is it any sort of disaster for sterling to fall and boost our industrial competitiveness – far more worrying if it was being artificially held up by some misconceived “strong pound” policy. We now have rightly a set of policies on tax and regulation to stimulate growth. It is important to leave sterling free to find the level that will allow these policies to work by pushing up the trade balance and direct investment inflows in the balance of payments. We should let markets work and pay no attention to idiots who cry ‘crisis’.” – Patrick Monford, Daily Telegraph

  •  Floating exchange rates make the economy far more adaptable to shocks – Matthew Lesh, Daily Express

>Today: Columnist Dan Hannan: No, the pound isn’t crashing over a trifling batch of tax cuts. It’s because the markets are terrified of Starmer.

Braverman criticises Sussex force for ‘policing pronouns’

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“A police force has been criticised by the home secretary for “policing pronouns” after it said it would not tolerate hateful comments about a child sex offender’s gender identity. Suella Braverman intervened after a row erupted about jailed Sally Ann Dixon. Dixon had committed the crimes as a man, and some Twitter users objected to police referring to Dixon as a woman. Sussex Police hit back against “hateful comments” but Ms Braverman accused the force of “playing identity politics”. The force apologised and deleted the tweet.” – BBC

  • Chest binding could be child abuse, say police amid ‘mounting horror’ at Mermaids trans charity – Daily Telegraph

>Today: Hardeep Singh on Comment: How the police meddle with identity politics while criminals run free

Badenoch woos US investors

“Kemi Badenoch will sell Britain as an island of “dynamism and ingenuity” like Manhattan as part of a pitch to boost transatlantic trade. The International Trade Secretary’s visit to New York comes a week after Liz Truss admitted that there was little chance of a free trade agreement with Washington in the next few years…She will make her comments at the Atlantic Future Forum, a major transatlantic trade and security summit aboard the HMS Queen Elizabeth aircraft carrier in New York harbour. Her two-day visit to the city will include back-to-back meetings with US investors, and she will also hold first talks with Katherine Tai, the US trade representative, to discuss unlocking barriers to trade and tackling unfair practices by foreign states.” – Daily Telegraph

Labour MP suspended for declaring Kwarteng only “superficially black”

“A Labour MP has been suspended from the party after making “racist comments” about Kwasi Kwarteng. Rupa Huq bizarrely described the Chancellor as only being “superficially black” at a party conference panel event yesterday called “what’s next for Labour’s Agenda on Race?” Labour took the action just hours after her comments – and Ms Huq went on to make a grovelling apology.” – The Sun

Russia denounced for Nord Stream “sabotage”

“Ukraine has accused Russia of causing leaks in two major gas pipelines to Europe in what it described as a “terrorist attack”. Ukrainian presidential adviser Mykhaylo Podolyak said the damage to Nord Stream 1 and 2 was “an act of aggression” towards the EU. He added that Russia wanted to cause pre-winter panic and urged the EU to increase military support for Ukraine. Seismologists reported underwater blasts before the leaks emerged. “There is no doubt that these were explosions,” said Bjorn Lund of Sweden’s National Seismology Centre, as quoted by local media.” – BBC

  • The Russian president is confident that his people can endure economic pain longer and better than Europeans – Daily Telegraph
  • Russia’s military might yet finish Putin off – Richard Kemp, Daily Telegraph

Other political news

  • Royal Mail workers to hold 19 days of strike action – BBC
  • EU ‘banking on UK’s financial woes’ to break Northern Ireland Protocol deadlock – Daily Telegraph
  • PayPal reinstates Free Speech Union accounts after being accused of ‘politically motivated’ ban – Daily Telegraph

Blackett: It’s time to scrap Defra altogether

“Yesterday Jeremy Clarkson and I, along with 5,000 rural voters, called on the Prime Minister to cut bureaucracy in agriculture. Every administration has promised to do that but so far none has, probably because Whitehall turkeys don’t vote for Christmas. So it requires boldness, lateral thinking and the useful military mnemonic KISS – Keep It Simple Stupid. The government should simply axe Defra altogether, keeping a small animal health department for TB, foot and mouth and other disasters. That was the status quo prior to 1939. As every farmer knows, Defra civil servants are unnecessary because they duplicate work done either in the environment agencies or the quality assurance schemes.” – Jamie Blackett, Daily Telegraph

  • Bat surveys benefit only one species. Bat surveyors – Matt Ridley, The Times

News in Brief

  • Will Liz Truss take on the IMF? – Kate Andrews, The Spectator
  • Starmer’s big pitch to Middle England has thrown down the gauntlet to Truss – Rakib Ehsan, CapX
  • Why has Starmer banished feminists? – Joan Smith, Unherd
  • An answer to the green lobbyists – John Redwood
  • Is Giorgia Meloni a female Mussolini? – Denis Macshane, The Article



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