Truss forced out

This week saw the conclusion to one of the most remarkable chapters in Britain’s political history. The end of Liz Truss’s premiership sadly does not mean an end to the instability she wrought on both the currency and bond markets. We now have a leadership election and, with no obvious unifying candidate in sight, the core problem of the disconnect between a sizeable chunk of MPs, the party membership and reality remains. This has so far finished off four prime ministers and there is little to suggest it won’t be fatal for a fifth.

Elsewhere we see many of the same difficulties manifesting themselves globally. External shocks like Covid, Ukraine and energy have caused inflation to go up a lot and central banks will ultimately need to cause a recession to bring it down. This means for the next few years there will be no convenient bond buying program that will allow governments to ignore their fiscal problems, although they will likely return eventually. While all nations will struggle to manage these difficult times, it would certainly help if the government wasn’t actively trying to make things worse.

For the following stories, please click on this link*

• UK– Hunt shreds mini-budget to try and restore confidence
• Inflation – CPI driven back above 10% by soaring food prices
• Equities: Big brands continue to pass rising costs on to customers

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