Is Rachel Reeves becoming the new Liz Truss?

[jazzer]

42 minutes ago, OutOfFocus said:

And shut down TfL while you are about it 🙂

No, no need to shut down tfl, just cut out the unnecessary and expensive beauracracy, simples. 

Sep, you don't even live here.

Edited July 24 by jazzer

[Sephiroth]

"Sep, you don't even live here."

 

???

[Spartacus]

Is it just me or does it feel like the governments romours, hints and leaks about what Reeves may do in the budget is spooking the horses? 

Reports in the media have hinted at  proposals to change council tax and stamp duty are causing the housing market to stall, the idea of changing the vat threshold is causing concern for small businesses and bank shares took.a hit as a tax hike is floated.

Whilst nothing is concrete till budget day, surly the fall out from rumours is doing a lot of harm to the economy and anxiety for a lot of people. 

It feels almost like we are being shown the worst case scenarios so when a bad one hits us we will all go, oh its not as bad as xyz would have been. 

Whilst there are always pre budget rumours, it does feel a lot like its out if control this time.

[alice]

National insurance for landlords? I’d  say over half of them are past retirement age

[malumbu]

They are putting out a few ideas to see what the general consensus is.  Whatever happens some will have issues.  We had decades of reduced tax burden but the world has changed.  I don't know the answer.

[Spartacus]

@malumbu I don't know the answer either but I do know that floating multiple ideas leads to uncertainty and spooks the economy. 

If they want to grow it, they should be more cautious about what they say as they are currently in danger of digging the financial black hole deeper as markets and investors will be wary. 

[vladi]

53 minutes ago, malumbu said:

They are putting out a few ideas to see what the general consensus is.  Whatever happens some will have issues.  We had decades of reduced tax burden but the world has changed.  I don't know the answer.

Floating a few ideas to gauge consensus indicates that there is no strategic plan.  It's just political dithering.

It represents a fundamental inability to recognise the fundamental structural  issues concerning the nations economy. In keeping with France, Germany and many other European countries, the UK's economic health is in decline. In the last two decades, much of government spending has been funded by debt. 

The cost of servicing that debt is currently running at around £95 billion and that is increasing steadily. It means we are living beyond our means. We are in a debt spiral. the government is funding a welfare state that has gone out of control.

We cannot continue to have a situation where millions here prefer to live off Universal Credit  plus other benefits. Some of them also earn additional untaxed income from the grey economy.

We have to reduce govt spending. It is the elephant in the room. There has to be cutbacks - no tinkering but real cutbacks  and austerity. Committing to austerity and  major cutbacks will reestablish credibility in the financial markets. This alone will reduce the cost of servicing the national debt. It's a virtual circle but it does need political courage not indecisiveness.

Stop rearranging the deck chairs on the Titanic.!

 

[malumbu]

Look at the national debt of the US.  It's ginormous.  The US spent their way out of the 1930s depression. Which is what the UK should have done rather than the Coalition's austerity.

Look at the harm and division austerity led to in the UK.

If only it was simple.

[vladi]

2 hours ago, malumbu said:

Look at the national debt of the US.  It's ginormous.  The US spent their way out of the 1930s depression. Which is what the UK should have done rather than the Coalition's austerity.

Look at the harm and division austerity led to in the UK.

If only it was simple.

First, the US Dollar is a reserve currency. Secondly, the 1930's depression was a 100 years ago and was caused by several factors including excess borrowing to fund stock market speculation.
When Harold Wilson had to go begging to the IMF to bail out the economy, the IMF lent the money but imposed various austerity measures.
If the UK has to go cap in hand to the IMF again, then rest assured the IMF will stipulate  changes which equate to austerity.   this is the IMF's standard terms. Just look at Argentina.

Take the pain to get the gain!

[jazzer]

We are already in a depression, not a recession. 

[vladi]

5 minutes ago, jazzer said:

We are already in a depression, not a recession. 

And that depression will get deeper if the cost of debt servicing increases.

Lack of clear fiscal strategy means uncertainty in the financial market. This results in markets demanding greater interest rates for new gilt sales. This in turn leads to increasing costs of debt servicing. Unless drastic austerity measures are taken , it becomes a doom loop.

Recovery cant be done with more taxes. Major spending cuts have to be made now. That means cuts of around £100 bn per year. Painful? Yes, most certainly, but absolutely necessary.