Watching the Westminster swamp dwellers, claws at the ready …

 

Omigawd – willya look at that turmoil! The Bank of England had to ‘do something’ to avert ‘pensions collapse’ and spent £65bn buying up gilts This event is splashed across the front pages this morning, dead tree press (link) or online: no difference. We’re told that this is the fault of Truss and Kwarteng. Apparently the rest of the world has no financial problems whatsoever: no inflation, no energy crisis, no nothing. And then, would you believe it, the government will not U-Turn on that mini-budget (link), even though Labour, Tory backbenchers and all MSM ‘experts’ are telling them to!

I’m not a banker, a financial expert or economist, so I had to check out what this BoE intervention was all about. It appears to have been aimed at private sector ‘final salary’ schemes which:

“[…] pay workers a percentage of their salary on retirement. These pensions are regarded as the gold standard because they are guaranteed and do not depend on investment performance. They are also inflation-linked. Final salary schemes are becoming rarer in the private sector. Their more modern replacement, defined contribution schemes, work differently and so did not need action from the Bank. Almost all public sector final salary schemes also work differently. These are funded on a “pay-as-you-go” basis by the employer, backed if necessary by the taxpayer, so they were not in danger.” (paywalled link)

Right. So why did the BoE intervene? See this bland explanation in The Times:

“The Bank of England yesterday announced a £65 billion emergency intervention to avert an economic crisis in the aftermath of the government’s mini-budget. In a highly unusual move that economists warned could fuel inflation, the central bank pledged to buy billions of pounds of government debt to prevent people’s pensions being put at risk. It warned of a “material risk” to Britain’s financial stability after Kwasi Kwarteng’s tax-cutting measures on Friday.” (link, paywalled)

So it was to avert an economic crisis which, according to MSM ‘experts’, was caused by Kwarteng’s tax-cutting mini-budget! Odd, isn’t it: we’re being nudged into accepting that only those tax cuts created this current economic crisis, as if there wasn’t one before yon tax cuts.

There was no inflation, there were no exorbitant energy prices, no turmoil on Wall Street, no detrimental effects of sanctions – Merrie Olde England was a veritable little paradise, untouched by ‘events’ in the rest of the world. If you believe that … Next, see a rather hair-raising explanation reported in the DT (my emphasis):

“The Bank […] stepped in to buy long-term gilts, as plunging markets for UK debt sent borrowing costs spiralling and forced pension funds to dump their assets. Economists compared the crisis to the run of withdrawals that led to the collapse of Northern Rock in the financial crisis. However, the move by Governor Andrew Bailey helped restore some calm to markets, and pensions experts said retirement pots were not under threat.” (paywalled link)

Alex Brummer in the DM asks: “It’s 12 years since the end of the financial crisis… How can such risky trading be happening all over again?” (link). Wouldn’t we all like to know! Wouldn’t we like to know why all those ‘experts’ to whom we must look up were incapable of predicting this market reaction? Allister Heath in the DT remarks (my emphasis):

“It is easy to see why the Chancellor didn’t predict such a response. When it comes to fiscal impact, the overwhelming bulk of the policies announced had already been trailed, and the cost of the energy bailout looks a lot lower. Spending is being cut already because inflation is depressing public sector wages, and fiscal drag continues to do its dirty work.This was an ideological, visceral reaction to a Government financial institutions don’t properly understand. The elite mood music in 2022 is set by Left-wing American economists and a hysterical Twitterati that loathes Truss, Brexit and supply-side economics.” (paywalled link)

So all those financial managers, ahem: ‘experts’ already knew what was coming – but still were unprepared? Or were they indeed driven by international and national hordes of ‘expert twatters’ on Antisocial Media but not by ministers or mandarins? That might also explain the remark by that old warhorse  Sir Kenneth Clarke: “I’ve never known a Budget cause a financial crisis like this” (paywalled link).

One might indeed wonder if certain vested interests have been ‘managing’, strictly en coulisse, to fabricate this turmoil. Let’s not forget the  intervention by the IMF, led by a former EU and anti-Brexit bureaucratess. Let’s also not ask why there was no such turmoil when the ECB bought up all those EU ‘gilts’, for years. Shouldn’t Remainers in the MSM and the political parties point out that the BoE has finally learned from the mighty Madame Lagarde? Odd, innit!

There’s more turmoil looming ahead. Right on cue for the weekend, the DM reports that “Ministers to slash BILLIONS off Whitehall budgets to reassure markets finances ARE under control: Welfare faces cuts […]” (link).

To crown it all, the new dahlink of the meejah, Starmer, has called for Parliament to be recalled immediately. The HoC is in recess until the week after next because of the Tory AGM which starts on Sunday, so Starmer’s appeal is just attention-grabbing, as is his outcry that Truss was ‘a danger to the economy and had lost control’ (link, paywalled). I note with interest that Labour looks to be in bed with the banks because Starmer seems to prefer that his clients to pay more taxes in order to pacify ‘the markets’ which are controlled by Wall Street and bankers. Has Labour now turned blue? 

I leave you with another puzzling question: why are certain Tory backbenchers criticising Truss now? Are they all Rishi fanbois? What would Sunak, what would they have done differently? we dunno – they don’t say. Will we hear them when yon Autumn Conference kicks off, without Rishi? Fun and games ahead!



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