Tuesday 1 November 2022

The Month That Was……October 2022

What a month…….one that will stand the test of time. Absolutely not in a good way, obviously.

October 2022 will always be remembered for the fallout from the mini-budget concocted by Lizzie and delivered by Kwasi……with a financial legacy that will last years.

Who would have thought that all those times Boris Johnson was being hailed as the worst Prime Minister this country has ever seen, Lizzie was waiting in the wings thinking: “Hold my beer…”


Here’s a recap of all things October 2022……warning, some of which are scenes of a disturbing nature.

The month kicked off with a financial meltdown as a reaction to the (not very) ‘mini’ Budget. And what a meltdown it was. Fear not though……Kwasi reacted at lightning speed to address the currency crisis by announcing his grand master fiscal plan to pay for £250 billion of energy crisis cash and tax cuts would be announced in……two months’ time. It was quite sweet that he thought he would still be in a job then. Bless him.


Lizzie and Kwasi then rolled out a new defending tactic by blaming the debacle of the last 12 years on Labour as they may or may not be elected in 2 years’ time. Priceless.

Then Lizzie and Kwasi did a u-turn on the 45% tax cut to 40% due to the uproar. “We get it” was their collective social media campaign. Well, if you got it, you wouldn’t have done it in the first place. Idiots. I’m all for people doing work experience but not so keen when it’s in the Government.

Lizzie spent about 4 days stating that she was "absolutely committed" to cutting tax for the rich. Then she cancelled the tax cut. Lizzie had boasted she was prepared to make unpopular decisions……but her decision on the tax cut for the rich was unpopular……so she cancelled it.

Still with me?

Her 10-day experiment with tax cuts cost a £65 billion bailout from the Bank of England to shore up financial markets. To put that into perspective……to imagine what £65 billion looks like……just think of an idiot (probably a cabinet minister) burning £3,600 per hour……every single hour……since the birth of Christ.

Lizzie then did the rounds of interviews to tell all that she had solved the energy crisis. However, British Gas had to take out full-page newspaper adverts to correct Lizzie’s misinformation that energy bills would be capped at £2,500 (incorrect).

In a change of tact and to show that she is a woman of the people, Lizzie then claimed she was the first Prime Minister to go to a comprehensive school. But get this……she isn’t even the first female Tory Prime Minister of the last 5 years to go to a comprehensive school (Theresa May). Clueless stuff.

Lizzie continued her foot in mouth experiment……“I grew up in the 1980s, which were characterised by boarded up shops, people with no hope turning to drugs, families struggling to put food on the table. And that's why we need to get back to Thatcherism”. Lizzie seemingly forgetting that Thatcher was in charge throughout the 1980s!

Keen to show the benefits of the mini-Budget, Kwasi’s Treasury tweeted: “Thanks to the Growth Plan, a typical first-time buyer in London moving into a representative terraced house will save £11,250 on stamp duty and £1,050 on the household’s energy bills — and, if they earn £30,000, almost an additional £400 on tax.”

What a load of utter nonsense. To make that stamp-duty saving, you would need to be buying a £500,000+ property. Assuming a 10% deposit, the cheapest fixed mortgage would cost £2,400 per month……more than the net take home pay of someone on £30,000. Quite frankly, it was financially illiterate……from the department handling public finances!

Then the International Monitory Fund called the Government’s economic policy a “material risk to UK financial stability”. And then for good measure the IMF issued (for the first time EVER) a second warning about the tax and energy policies at Number 10. Ouch.

Under pressure to stand down, Kwasi responded by stating "I'm not going anywhere"……then promptly got on a plane home to be sacked. This chaos wiped £300 billion off the value of UK assets.  

Kwasi lasted five days less than David Blaine was in that box hanging over the Thames. I literally have cheese in my fridge that has lasted longer. 38 very long days. Four Chancellors in four months is an utter shambles.

To be clear, Kwasi was sacked by Lizzie for the crime of delivering the central plank of Lizzie’s economic policy. 

Lizzie then ‘chose’ Jeremey Hunt as her new Chancellor. What actually happened was backbenchers ordering her to appoint Jezzer as a security guard as he is the nearest thing to an adult that the Tory’s could think of. He was the unofficial Prime Minister.

And then Lizzie performed another u-turn by scrapping the scrapping of the planned Corporation Tax rise (still with me???!!!). A double scrap……if such a thing exists. Surely if you enter number 10 and perform two u-turns you end up back on the street? It felt only a matter of time.

Jezzer then spent all of just two days going through the figures and announced to Parliament that it was an absolute mess. He took just 6 minutes to reverse out of the mini-budget car crash by axing £32 billion of the planned tax cuts.  

Jezzer’s statement was one of the wildest things I've seen in the Commons. He slowly unpicked pretty much every policy that Lizzie and Kwasi announced, with Lizzie sitting solemnly behind him. The politically deceased, attending her own funeral.

To be fair to Jezzer, he grasped three things very quickly…….

1. To avoid more investment market mayhem he had to produce something fast……and he did.

2. If he steadied investment markets then he could lower gilt yields……and lower Government borrowing costs as a consequence.

3. By reducing energy guarantees from 2 years to 6 months, he correctly saw it as a badly targeted blank cheque that left the public finances exposed to unlimited volatility in global gas prices. Better to target help at people who need it.

Lizzie then promised at Prime Minister Questions that she would protect the triple lock on State Pensions. Jezzer refused to say they were protected. Then Lizzie said she was "absolutely committed" to protecting pensions. And then Number 10 said they were “no longer committed to” protecting pensions. All this in one day.

Then after a shambles of a commons vote on fracking that involved Tory MP’s being forced (physically) to vote with Lizzie, the house of cards toppled. “I’m a fighter not a quitter” said Truss……before quitting within 24 hours. It took longer to elect Lizzie than she has been Prime Minister.

Lizzie resigned with a smirk on her face and a short speech about how the UK and economy weren’t ready for her ideas. She was simply too brilliant for us.

So that was it then for Lizzie……but what a blast it’s been. A month of economic buffoonery, ripped up in a weekend by Jezzer. Just about all that’s left of the great fiscal experiment is Lizzie herself. When has a sitting Prime Minister been dealt such humiliation by the Chancellor they’ve just appointed?

Her 44 days in charge saw her become the shortest serving Prime Minister in history, beating previous record holder George Canning (who died of tuberculosis 119 days into the job). 

Credit where it’s due, Lizzie comprehensively met my expectations. Other than being an undercover agent for Labour, what other possible explanation could there be for her creating such a bloody mess?

It reminds me of a quote from Warren Buffet……“Only when the tide goes out do you discover who's been swimming naked.” It’s fair to say that Lizzie has been skinny dipping.

The Tory party then scrambled with a one-week emergency process to find a new leader……and up stepped Rishi as the only nominee……who was not elected by you or me. The third Prime Minister in seven weeks. Brilliant.

The whole saga has been baffling, demoralising and defying all logic. But a few things stood out for me.

Firstly, Tory MP’s clearly do not trust Tory Party members to choose their party leader. Let me be a little clearer……they should never again have the final say on who is Prime Minister of our country. They are blindingly moronic. All clear now!

Secondly, we have gone from 20,000,000 electing BoJo, to 81,326 selecting Lizzie to 357 MPs selecting Rishi. He was literally given the keys to Number 10 without him saying a single word publicly about how he would govern. Democracy at its best.

Thirdly, 102 MP’s thought that of all the options available, BoJo was the most credible choice available……six weeks after he was kicked out by the very same people. He eventually withdrew from the leadership contest and stated "this is simply not the right time"……presumably due to the imminent results of the investigation into his conduct whilst at Number 10. Again, just to be crystal clear……there will never be a ‘right time’ for more BoJo.

In just 4 months we have had 3 Prime Ministers, 4 Chancellors, and 4 Home Secretaries, and we haven't even got started on the inevitable reshuffles, sackings and vindictive recriminations.

And breathe. I’m done.

 

The Numbers

Rishi’s inbox is dominated by some pretty horrible figures that need tackling.

The value of Sterling against the Dollar will be a key indicator that will be followed closely as it affects everyone - from shoppers to business owners to investors. The Dollar is the default currency around the world to trade in and when the pound is worth less, the cost of goods imported from overseas goes up.

Gas, oil, technology, food (the UK imports 46% of the food it consumes), etc.

Political stability and good leadership will be the key to retain the £ / $ exchange rate from dropping back to $1.03.

Another key indicator will be inflation, which is currently running at 10.1% driven by the highest rate of grocery inflation for 42 years. Bread, cereals, meat products, milk, cheese and eggs leading the cost of grocery increases (running at an annual rate of 15%).

Those in receipt of the State Pension will be awaiting Rishi’s stance. The State Pension has a ‘triple-lock’ which means pensions rise by either average earnings, CPI inflation or 2.5% - whichever is highest.

With average earnings most recently hitting 5.4%, the triple lock should ensure pensions rise by this month’s declared inflation rate of 10.1% in April 2023. We shall see if Rishi thinks there is political wiggle room to get out of this one.

If we can get inflation under control, then the Bank of England will be under less pressure to raise interest rates……another key indicator.  

Mortgage rates continue to climb, hitting their highest levels in 14 years. The average 2 and 5 year fixed rates are now over 6.5% as UK borrowing costs remained elevated amid continued economic uncertainty. Such levels of interest are not sustainable long term and it can only raise concern for house prices and the building industry as a whole.

My own key indicator is the ‘ever-sexy’ Purchasing Managers Index……it’s the ‘go to’ of all the indexes and it’s the reason that it has been my favourite index for years. It’s solid, reliable, insightful and never lets me down. In October it showed that growth in the services sector (which accounts for 74% of the economy), ground to a halt for the first time in 18 months……increasing fears that the economy is heading for recession.

Plenty for Rishi to consider as the removal van move the remainder of his belongings from Number 11 to Number 10.

And one final figure for you……after just 44 days in office, Lizzie will now be entitled to £115,000 per year from the taxpayer for the rest of her life. Disgusting.

 

Trump of the Month

I’m not even going to pretend there were other worthy candidates for Trump of the Month. This month’s award absolutely has to go to……Liz Truss

After 44 days in the job, Lizzie's approval rating was lower than BoJo’s was in his final poll before he was forced from office. Now that is spectacular.

Investment Traders in London refer to Lizzie as “Daggers”……as in Dagenham……two stops past ‘Barking’ on the underground.

What a time to be alive.

No more questions your honour.

Trump Lunacy Rating: 10 / 10

 

And Finally……

“Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin.”

Mother Theresa

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