A ""continuing reflection of the weakening predictability of fiscal policymaking seen in previous years"

[Wobblers]

This is Moody's, one of the two major rating agencies who rate the ability of governments to pay the interest on their debts [1], take on the last few weeks of UK economic policy (I use the word "policy" in the loosest possible sense). It's a thoroughly damning indictment.

The conservative party's always proclaimed themselves as the party of sound economic judgement. Moody's are only the latest major financial institution to refute that claim. Whilst it's certainly true that coming out with a minibudget with very substantial tax cuts which were uncosted were always going to be hugely destructive in terms of trust, this is only the latest in a string of bad decisions which have worried the markets. To the City, the Tories can no longer claim to be the party of fiscal rectitude - and that is a big change.

This doesn't affect the views of most voters. But that should be of little comfort to the Tories, because the worst is yet to come. Inflation is running at levels not seen in 40 years. We're only just entering a recession. It looks like support for energy bills will end for most next April - and the ensuing 80%+ rise will clobber even those well off in middle England (who're more likely to vote conservative). Add all that to the fact that the last few weeks of economic mismanagement have spiked mortgage rates, it's evident most people are going to be significantly poorer in the next few years - and the damage will be lasting.

A government can get away with a great deal - provided people perceive they're better off. But making most worse off is seldom forgiven - all the more so when you bill yourselves as the party for economic growth and stability. I think it likely that this will hang round the Tories for years - decades, likely - to come. Any claim to fiscal competence will be met with jeers. And anyone who stands on a platform to cut taxes to boost growth will envitably be compared to Truss. It's their 1970s moment.

[1] The other one is Standard and Poor's. Nominative determinism, or what?

 

[Rusty Nails]

This is Moody's, one of the two major rating agencies who rate the ability of governments to pay the interest on their debts [1], take on the last few weeks of UK economic policy (I use the word "policy" in the loosest possible sense). It's a thoroughly damning indictment.

The conservative party's always proclaimed themselves as the party of sound economic judgement. Moody's are only the latest major financial institution to refute that claim. Whilst it's certainly true that coming out with a minibudget with very substantial tax cuts which were uncosted were always going to be hugely destructive in terms of trust, this is only the latest in a string of bad decisions which have worried the markets. To the City, the Tories can no longer claim to be the party of fiscal rectitude - and that is a big change.

This doesn't affect the views of most voters. But that should be of little comfort to the Tories, because the worst is yet to come. Inflation is running at levels not seen in 40 years. We're only just entering a recession. It looks like support for energy bills will end for most next April - and the ensuing 80%+ rise will clobber even those well off in middle England (who're more likely to vote conservative). Add all that to the fact that the last few weeks of economic mismanagement have spiked mortgage rates, it's evident most people are going to be significantly poorer in the next few years - and the damage will be lasting.

A government can get away with a great deal - provided people perceive they're better off. But making most worse off is seldom forgiven - all the more so when you bill yourselves as the party for economic growth and stability. I think it likely that this will hang round the Tories for years - decades, likely - to come. Any claim to fiscal competence will be met with jeers. And anyone who stands on a platform to cut taxes to boost growth will envitably be compared to Truss. It's their 1970s moment.

[1] The other one is Standard and Poor's. Nominative determinism, or what?

This has been coming for years. The problem is that, even though the facts show otherwise, the old belief amongst their followers about the Tories being the party of sound might still hang around. I also believe that things will be seen to be worse for just about everyone and it really should be a gift for Starmer and the Labour Party in their campaign for the next election...if they can also show that they are not the party of internal division.

 

[Wobblers]

This has been coming for years. The problem is that, even though the facts show otherwise, the old belief amongst their followers about the Tories being the party of sound might still hang around. I also believe that things will be seen to be worse for just about everyone and it really should be a gift for Starmer and the Labour Party in their campaign for the next election...if they can also show that they are not the party of internal division.

You might think people will forget - yet how many still bang on about that tired old trope about the seventies when talking about Corbyn - or any other vaguely leftish politician?

The UK government credibility has collapsed in the eyes of the markets that only a change in government would restore it. And that matters, because it means we're paying much more on government debt. That's money that can't be spent on public services. We'll all pay for that in terms of increased taxes and decreased public services.

Few governments ever survive economic incompetence. Crashing out of the ERM did for Major - and he was an intellectual colossus compared to the bevy of bozos we have masquerading as ministers. Most who voted Tory in 2019 will be considerably worse off when they come to vote in 2024. They're unlikely to believe any conservative claim to economic reliability. I doubt this trussterfark will be forgotten any time soon.

Finally, yes, this is a gift to Labour: Kier Starmer doesn't need to do anything to pick up votes: which is fortunate given that nothing is precisely what he seems to be doing. But that's a whinge for another thread, isn't it?