This is going to be an investment-led recovery, which not only makes the UK a more attractive place in which to invest but also directs new investment into parts of the country which need it most.
Britain’s high street banks might start focusing on the best possible stewardship of their clients’ dwindling funds rather than pushing their own pet political agendas.
We cannot know what policy, the pound, or prices will look like next week, let along next year. Predicting what interest rates will be is therefore highly difficult.
At the last election 81 per cent of voters believed that a Conservative victory would mean fewer migrants. The party’s manifesto explicitly promised that “there will be fewer lower-skilled migrants and overall numbers will come down.”
The wise men of Trussonomics are more divided on this subject than one might think.
The risks of an adverse market reaction were obvious in advance of Kwarteng’s statement, and a wise Chancellor would have taken heed of it. Unfortunately, the Permanent Secretary had been dismissed and he ploughed on apparently oblivious to the risks.
The Prime Minister and Chancellor will have been hoping for a higher rate rise today. Trussonomics requires a tighter monetary policy.
He will need to outline clearly his fiscal principles, so the market understands the commitment to fiscal discipline through reducing the ratio of debt to GDP.
Of course one must not be complacent. I have worked long enough in the markets to know that when they smell blood there can be trouble.
The first of a series of five articles on ConservativeHome this week about the main challenges that await the new Prime Minister.
Want an example of economic fatalism? Just read reactions to the Foreign Secretary criticising the Bank of England’s inflation performance.
Nobody is talking about a return to the days of politicians setting interest rates, but it must reckon with its mistakes.
The Foreign Secretary’s proposals most resemble Anthony Barber’s 1972 ‘dash for growth’, pouring fuel on the fire of an economy already racked by monetary expansion and a looming energy crisis.
My guess is that she is too smart to allow the worst case scenario to happen. To do that, however, she is going to have to move swiftly from focusing on winning the confidence of Conservative MPs and party members to winning the confidence of the markets.
She explains why she changed her mind on Brexit, confirms she would change the Bank’s mandate, and says she would be happy to find a place for Sunak in her team.