MadMonk wrote:The Economist is not exactly a left-wing publication. I'm not an economist, could someone give me a quick explanation of what is happening in Londontown?
Left-wing maybe not but definitely part of the Orthodoxy.
Right so, our previous Finance Minister under Boris, Rishi Sunak imposed the largest tax increases on British history.
His tax increases came from 3 separate areas:
1) He froze the thresholds of tax so that they do not increase with inflation, he did that 2 years ago, that meant that the tax-free income of around 10-12k per year is no longer increasing in line with inflation resulting on a boom of tax receipts.
2) He increased the NI contributions applicable since last April.
3) He increased corporation tax from 19% to 25% to apply from next April 2023.
These measures brought the UK to one of the highest overall taxation rates in the G7 and also the highest tax burden since 1948. At the same time the UK boasts the second lowest debt to gdp ratio in the G7.
Liz Truss was elected on a promise to reverse these tax increases and so she did, she has announced her plan since the summer and the markets have already accounted for these measures.
At the same time she announced the much anticipated energy subsidy which pundits, the left, the market and everybody hailed as nicely done
Kwasi and Liz decided to go a step further and reduce the top-tax rate from 45% for incomes of 100k and above to 40%, the legacy of Gordon Brown.
This measure costs at the worst-case scenario 2 billion and according to the IMF, Moodys and the BoE, it is a mega sin that will destroy UK finances and turn the country into an emerging market economy causing a run on the streling, gilts, bonds and crashing FTSE. These are actual statements produced by the IMF, Moodys's and the Bank of England.
The Bank of England has consistently refused to increase interest rates to tame inflation because they do not want the house prices to go down. This fight has been going on between the government and the BoE for at least a year and now the BoE is using this opportunity to take down the government and tarnish its reputation before it even begins.
ECB and Fed raised interest rates by 0.75%, BoE belatedly by 0.5% and only after being threatened by the government of losing its independence if they fail to act.
Labour, the left and BoE orthodox buddies from around the world have all latched on to this narrative, effectively blaming a tiny 2 billion for the destruction of the British economy. This is unable to convince even economic illiterates let alone actual economists.
These 2 billion tax cuts on the top rate are merely symbolic anyway because no person who makes that kind of money declares them as personal income, they set up limited companies, they use ISA's and SIPP's which are tax free to reduce their declared income below the threshold.
This is a well-known fact and this measure will actually bring in more money for the Treasury but nobody seems to care about reality anymore.
Brexit Britain is a renegade which the markets, economist, Moody's, IMF are all trying to punish for veering slightly from their orthodox message.
I hate Brexit as well but I'm not an idiot pursuing our national impoverishment so that Brussels and New York can be happy.
This is nothing less than a clear-cut attack on the British economy and the British people.
During the summer Rishi warned/threatened that unless he gets elected this is what is going to happen, doom for the British economy, now Rishi is a billionaire non-UK-domiciled resident that was hoping to become PM, he failed and he is now saying "I told you so". This is engineered so that he can say that because very apparently Rishi had been the chosen one for the Economist, Times, Guardian, etcetera.
The guy who overtaxed an economy on recession.
And of course let us ignore the fact that the euro and the yen have all collapsed as badly or even worse than sterling because of the surging dollar due to the Fed hiking interest rates.
The whole thing is ridiculous and reeks like a rotten fish.
2 billion will crash the British economy.
Government asks BoE to take the same interest-rate action the Fed & the ECB took but instead of being praised they are being tarnished.
EN EL ED EM ON
...take your common sense with you, and leave your prejudices behind...