Is the current run on the pound a repeat of 64 - 67?

[Nimrod103]

USD has probably reached a cyclical high
GBP back to USD 1.24 - hardly a crisis

So the exchange rate is determined by where a country is on the interest rate tightening cycle? And with the BoE being so far behind on the tightening curve, and now saying that inflation has peaked (unlike the Fed and ECB), can we expect another bout of £ weakness?

Not due to the Truss/Kwarteng mini budget after all? Who would have guessed that?

[NotSure]

USD has probably reached a cyclical high
GBP back to USD 1.24 - hardly a crisis

So the exchange rate is determined by where a country is on the interest rate tightening cycle? And with the BoE being so far behind on the tightening curve, and now saying that inflation has peaked (unlike the Fed and ECB), can we expect another bout of £ weakness?

Not due to the Truss/Kwarteng mini budget after all? Who would have guessed that?

Nothing to do with that at all!



From: https://www.economicshelp.org/blog/171412/economics/forecasts-for-pound-sterling-in-2023-and-ppp-rates/

[vand]

USD has probably reached a cyclical high
GBP back to USD 1.24 - hardly a crisis

So the exchange rate is determined by where a country is on the interest rate tightening cycle? And with the BoE being so far behind on the tightening curve, and now saying that inflation has peaked (unlike the Fed and ECB), can we expect another bout of £ weakness?

Not due to the Truss/Kwarteng mini budget after all? Who would have guessed that?

Nothing to do with that at all!



From: https://www.economicshelp.org/blog/171412/economics/forecasts-for-pound-sterling-in-2023-and-ppp-rates/

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

[NotSure]

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

For sure, it's purely coincidental that the pound hit multi-decade lows within hours of that 'fiscal event' and has now recovered to a decent level vs. dollar as the 'fiscal event' has been completely reversed. I'd love to hear the real reason for that from you?

Even Kwarteng admits that he and Truss messed up royally:

Liz Truss and I ‘got carried away’ writing mini-budget, admits Kwasi Kwarteng
Sacked chancellor says he and ex-PM failed to consider political and economic consequences

Kwasi Kwarteng has admitted he and Liz Truss “got carried away” when they wrote the disastrous mini-budget that led to both of them leaving their jobs just weeks after they entered Downing Street.

Kwarteng announced a raft of tax cuts without any reduction in spending in September, which led to the pound crashing against the dollar, pension funds nearly collapsing, a £65bn Bank of England bailout, soaring mortgage costs, and the cost of government borrowing increasing. He also said he would remove the cap on bankers’ bonuses.

The MP for Spelthorne, who was sacked by Truss after 38 days, has now said that the then prime minister and her team had lost perspective on the budget and its political or financial consequences.

“People got carried away, myself included,” Kwarteng told the Financial Times. “There was no tactical subtlety whatsoever.

“There was a brief moment and the people in charge, myself included, blew it.”......

https://www.theguardian.com/politics/2022/dec/10/liz-truss-and-kwasi-kwarteng-got-carried-away-writing-mini-budget


Edited to add "More to come....."

[Nimrod103]

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

For sure, it's purely coincidental that the pound hit multi-decade lows within hours of that 'fiscal event' and has now recovered to a decent level vs. dollar as the 'fiscal event' has been completely reversed. I'd love to hear the real reason for that from you?

Even Kwarteng admits that he and Truss messed up royally:

Liz Truss and I ‘got carried away’ writing mini-budget, admits Kwasi Kwarteng
Sacked chancellor says he and ex-PM failed to consider political and economic consequences

Kwasi Kwarteng has admitted he and Liz Truss “got carried away” when they wrote the disastrous mini-budget that led to both of them leaving their jobs just weeks after they entered Downing Street.

Kwarteng announced a raft of tax cuts without any reduction in spending in September, which led to the pound crashing against the dollar, pension funds nearly collapsing, a £65bn Bank of England bailout, soaring mortgage costs, and the cost of government borrowing increasing. He also said he would remove the cap on bankers’ bonuses.

The MP for Spelthorne, who was sacked by Truss after 38 days, has now said that the then prime minister and her team had lost perspective on the budget and its political or financial consequences.

“People got carried away, myself included,” Kwarteng told the Financial Times. “There was no tactical subtlety whatsoever.

“There was a brief moment and the people in charge, myself included, blew it.”......

https://www.theguardian.com/politics/2022/dec/10/liz-truss-and-kwasi-kwarteng-got-carried-away-writing-mini-budget


Edited to add "More to come....."

But AIUI nothing in the Kwarteng mini budget had not been flagged up well beforehand, except the small giveaway on the highest income tax rate, which in monetary terms was insignificant, and may in the medium term have raised more than it cost.
What wasn't flagged up was the BoE failing to raise rates as fast as the FED, and Bailey looking like he was fast asleep at the wheel.

[servodude]

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

For sure, it's purely coincidental that the pound hit multi-decade lows within hours of that 'fiscal event' and has now recovered to a decent level vs. dollar as the 'fiscal event' has been completely reversed. I'd love to hear the real reason for that from you?

Even Kwarteng admits that he and Truss messed up royally:

Liz Truss and I ‘got carried away’ writing mini-budget, admits Kwasi Kwarteng
Sacked chancellor says he and ex-PM failed to consider political and economic consequences

Kwasi Kwarteng has admitted he and Liz Truss “got carried away” when they wrote the disastrous mini-budget that led to both of them leaving their jobs just weeks after they entered Downing Street.

Kwarteng announced a raft of tax cuts without any reduction in spending in September, which led to the pound crashing against the dollar, pension funds nearly collapsing, a £65bn Bank of England bailout, soaring mortgage costs, and the cost of government borrowing increasing. He also said he would remove the cap on bankers’ bonuses.

The MP for Spelthorne, who was sacked by Truss after 38 days, has now said that the then prime minister and her team had lost perspective on the budget and its political or financial consequences.

“People got carried away, myself included,” Kwarteng told the Financial Times. “There was no tactical subtlety whatsoever.

“There was a brief moment and the people in charge, myself included, blew it.”......

https://www.theguardian.com/politics/2022/dec/10/liz-truss-and-kwasi-kwarteng-got-carried-away-writing-mini-budget


Edited to add "More to come....."

But AIUI nothing in the Kwarteng mini budget had not been flagged up well beforehand, except the small giveaway on the highest income tax rate, which in monetary terms was insignificant, and may in the medium term have raised more than it cost.
What wasn't flagged up was the BoE failing to raise rates as fast as the FED, and Bailey looking like he was fast asleep at the wheel.

You know that thing the "true believers" do when the spaceship doesn't pick them up and they double down on their nutty fantasy, or make irrational excuses, because they don't have the cognitive awareness to make sane judgements (because they're so invested in the fantasy)?

[Nimrod103]

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

For sure, it's purely coincidental that the pound hit multi-decade lows within hours of that 'fiscal event' and has now recovered to a decent level vs. dollar as the 'fiscal event' has been completely reversed. I'd love to hear the real reason for that from you?

Even Kwarteng admits that he and Truss messed up royally:

Liz Truss and I ‘got carried away’ writing mini-budget, admits Kwasi Kwarteng
Sacked chancellor says he and ex-PM failed to consider political and economic consequences

Kwasi Kwarteng has admitted he and Liz Truss “got carried away” when they wrote the disastrous mini-budget that led to both of them leaving their jobs just weeks after they entered Downing Street.

Kwarteng announced a raft of tax cuts without any reduction in spending in September, which led to the pound crashing against the dollar, pension funds nearly collapsing, a £65bn Bank of England bailout, soaring mortgage costs, and the cost of government borrowing increasing. He also said he would remove the cap on bankers’ bonuses.

The MP for Spelthorne, who was sacked by Truss after 38 days, has now said that the then prime minister and her team had lost perspective on the budget and its political or financial consequences.

“People got carried away, myself included,” Kwarteng told the Financial Times. “There was no tactical subtlety whatsoever.

“There was a brief moment and the people in charge, myself included, blew it.”......

https://www.theguardian.com/politics/2022/dec/10/liz-truss-and-kwasi-kwarteng-got-carried-away-writing-mini-budget


Edited to add "More to come....."

But AIUI nothing in the Kwarteng mini budget had not been flagged up well beforehand, except the small giveaway on the highest income tax rate, which in monetary terms was insignificant, and may in the medium term have raised more than it cost.
What wasn't flagged up was the BoE failing to raise rates as fast as the FED, and Bailey looking like he was fast asleep at the wheel.

You know that thing the "true believers" do when the spaceship doesn't pick them up and they double down on their nutty fantasy, or make irrational excuses, because they don't have the cognitive awareness to make sane judgements (because they're so invested in the fantasy)?

Are you trying to make a political point on an economics board? Personally I neither like nor support any of them, but I am always in pursuit of facts and the truth.

[1nvest]

USD has probably reached a cyclical high
GBP back to USD 1.24 - hardly a crisis

So the exchange rate is determined by where a country is on the interest rate tightening cycle? And with the BoE being so far behind on the tightening curve, and now saying that inflation has peaked (unlike the Fed and ECB), can we expect another bout of £ weakness?

Not due to the Truss/Kwarteng mini budget after all? Who would have guessed that?

Nothing to do with that at all!



From: https://www.economicshelp.org/blog/171412/economics/forecasts-for-pound-sterling-in-2023-and-ppp-rates/

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

Fundamentally the UK if fubar. Political policies that induce lower productivity/decline in GDP, constant regulatory changes that would have your head spin.

FT100 lower in real terms than it was 30 years ago
50% down from where it was in 2000 (23 years ago)
Similar to where it was 10 years ago

Maybe employing pre-trained low-wage migrants rather than training our own has something to do with it. Political resolution - in the absence of training opportunities induce school leavers to go into poly's re-branded as uni's and come out with £70K of debts that increase at above inflation rates such that if/when they do work any pay above minimum wage is taxed at over 40% rates (tax/NI/student debt). Work Saturday overtime? Nah! not worth it.

Save during working years to fund your own pension - nah, all that going without holidays/extra's and all that gets you is you'll be sitting in a care home alongside someone who had housing benefits paid to them throughout their working life, and not having to pay a penny for their care costs, whilst you'll be paying £1500/week for the same, often having to sell your home that you scrimped to save for with the intent of making life better for your children to instead fund your own care costs as well as the freebee'rs that sit alongside you.

Savings for a pension, again a prime target to be raided/eaten in order to fund others who didn't bother saving.

Such policies are naturally inclined to see poor stock performance, a declining economy, declines in inward investments unless bribed, a declining Pound. Even the once highly respected NHS is being wiped out, opened up to anyone from anywhere who can get into the UK and claim they're worried about their safety/circumstances in their home country.

Sunak's idea of good policies including paying some £2500/month to stay at home during Covid, but not others. Net effect ... just lighter road traffic congestion for a while. Export Covid from the NHS into care homes, under threat of loss of registration if they refused, no PPE, clap for the NHS and a after-thought pin-badge for social care workers to pin to their tunic beneath their black bin liner DIY PPE.

Gone the same way of football. A team of individual multi-millionaires just lack the same passion. Same for a team of multi-millionaires MP's, who are mostly in it for the £80K/year salary, £80K/year additional expenses claim pocket money, a golden pension, and the main benefits from multi-millions in 'support' (bribes).

The decline of the Pound relative to the US$ and Euro is inevitable, at least if things continue as they presently are (micro mismanagement depicted by those who bribe to control MP's).

[XFool]

Fundamentally the UK if fubar. Political policies that induce lower productivity/decline in GDP, constant regulatory changes that would have your head spin.

FT100 lower in real terms than it was 30 years ago
50% down from where it was in 2000 (23 years ago)
Similar to where it was 10 years ago

Maybe employing pre-trained low-wage migrants rather than training our own has something to do with it. Political resolution - in the absence of training opportunities induce school leavers to go into poly's re-branded as uni's and come out with £70K of debts that increase at above inflation rates such that if/when they do work any pay above minimum wage is taxed at over 40% rates (tax/NI/student debt). Work Saturday overtime? Nah! not worth it.

Save during working years to fund your own pension - nah, all that going without holidays/extra's and all that gets you is you'll be sitting in a care home alongside someone who had housing benefits paid to them throughout their working life, and not having to pay a penny for their care costs, whilst you'll be paying £1500/week for the same, often having to sell your home that you scrimped to save for with the intent of making life better for your children to instead fund your own care costs as well as the freebee'rs that sit alongside you.

Savings for a pension, again a prime target to be raided/eaten in order to fund others who didn't bother saving.

Such policies are naturally inclined to see poor stock performance, a declining economy, declines in inward investments unless bribed, a declining Pound. Even the once highly respected NHS is being wiped out, opened up to anyone from anywhere who can get into the UK and claim they're worried about their safety/circumstances in their home country.

Sunak's idea of good policies including paying some £2500/month to stay at home during Covid, but not others.

I dunno. But I feel this may be the key takeaway here.

[richfool]

What wasn't flagged up was the BoE failing to raise rates as fast as the FED, and Bailey looking like he was fast asleep at the wheel.

That fits far better, with my thinking.

And now with the ECB increasing rates by a further 0.5% that continues to weaken sterling.

[1nvest]

Would seem that some Tories have a element of common sense

https://uk.finance.yahoo.com/news/lift- ... 00060.html

Senior Tories have said the Prime Minister should increase or even scrap the lifetime allowance because it acts as a “perverse incentive” to quit.
.
.
But ministers have been warned that the tax is now encouraging skilled people, especially in the NHS, to quit the workforce. One in six doctors told a recent survey they planned to retire early because they had hit the allowance limit.

But no regard for how student tax is a large disincentive, as is self care home funding if you opt to buy a home (that they promised to fix, opting to raise taxes to do so, but then directing the extra revenues towards the NHS instead of the care sector, before pushing it into the long grass).

In my local hospital the other day and I heard a bedside TV/radio indicating that across the three hospitals in the region over 5000 staff are employed. I'd guess that less than 1000 of those are actual doctors/nurses, the rest largely being office based pen pushers. Better structured and I suspect the NHS could be expanded to comfortable include care home type functions/services. End the discrimination that a motorcyclist with a brain injury is cared for for life within the NHS, but those whose minds age and become forgetful are branded as 'dementia' and expected to self-fund their care.

Or maybe the intent is to go the other way. Overweight ... self funding. Smoke or drink ... self funding (perhaps the reason they ask and record whether you smoke or drink as part of standard operational procedures nowadays, to have it on record whether you'll be a future self-funder or not).

[TUK020]

USD has probably reached a cyclical high
GBP back to USD 1.24 - hardly a crisis

So the exchange rate is determined by where a country is on the interest rate tightening cycle? And with the BoE being so far behind on the tightening curve, and now saying that inflation has peaked (unlike the Fed and ECB), can we expect another bout of £ weakness?

Not due to the Truss/Kwarteng mini budget after all? Who would have guessed that?

Nothing to do with that at all!



From: https://www.economicshelp.org/blog/171412/economics/forecasts-for-pound-sterling-in-2023-and-ppp-rates/

economicshelp is a GCSE/A-level resource that may be helpful for school kids, but its not how the real world works, where a million different things go into determining price and trends, not just the ones that are marked out by an annotation

Fundamentally the UK if fubar. Political policies that induce lower productivity/decline in GDP, constant regulatory changes that would have your head spin.

FT100 lower in real terms than it was 30 years ago
50% down from where it was in 2000 (23 years ago)
Similar to where it was 10 years ago

Maybe employing pre-trained low-wage migrants rather than training our own has something to do with it. Political resolution - in the absence of training opportunities induce school leavers to go into poly's re-branded as uni's and come out with £70K of debts that increase at above inflation rates such that if/when they do work any pay above minimum wage is taxed at over 40% rates (tax/NI/student debt). Work Saturday overtime? Nah! not worth it.

Save during working years to fund your own pension - nah, all that going without holidays/extra's and all that gets you is you'll be sitting in a care home alongside someone who had housing benefits paid to them throughout their working life, and not having to pay a penny for their care costs, whilst you'll be paying £1500/week for the same, often having to sell your home that you scrimped to save for with the intent of making life better for your children to instead fund your own care costs as well as the freebee'rs that sit alongside you.

Savings for a pension, again a prime target to be raided/eaten in order to fund others who didn't bother saving.

Such policies are naturally inclined to see poor stock performance, a declining economy, declines in inward investments unless bribed, a declining Pound. Even the once highly respected NHS is being wiped out, opened up to anyone from anywhere who can get into the UK and claim they're worried about their safety/circumstances in their home country.

Sunak's idea of good policies including paying some £2500/month to stay at home during Covid, but not others. Net effect ... just lighter road traffic congestion for a while. Export Covid from the NHS into care homes, under threat of loss of registration if they refused, no PPE, clap for the NHS and a after-thought pin-badge for social care workers to pin to their tunic beneath their black bin liner DIY PPE.

Gone the same way of football. A team of individual multi-millionaires just lack the same passion. Same for a team of multi-millionaires MP's, who are mostly in it for the £80K/year salary, £80K/year additional expenses claim pocket money, a golden pension, and the main benefits from multi-millions in 'support' (bribes).

The decline of the Pound relative to the US$ and Euro is inevitable, at least if things continue as they presently are (micro mismanagement depicted by those who bribe to control MP's).

Top rant.
A couple of questions:
- Do you feel better now?
- Should we cross post this to Bitter Lemons?

[CliffEdge]

TV and social media is not fit for purpose. The population is insane.
The insanity is invading lemonfool.

[1nvest]

A couple of questions:
- Do you feel better now?

Should just refrain from the once in 5 year slave suggestion box based system and be content as-is. Just annoying to see the likes of Poland ....

Touting the legislation, which will reduce the basic rate and ensure workers across the pay spectrum keep more of the money they earn, Polish PM Mateusz Morawiecki said the changes would encourage people “to work and be entrepreneurial”

https://uk.finance.yahoo.com/news/why-t ... 00133.html

whilst the UK instates a PM appointed by a very small proportion of the population, that is massively incompetent and wastes billions upon billions, and appoints a chancellor who is just as bad if not worse, and who opt for the complete opposite (declines in encouragement to be productive or be entrepreneurial, or even for the comfortable to remain here paying taxes (1% that pay a third of the income tax take that if lost requires the others having to pay 50% more in taxes to fill the hole)).

Can the UK really afford another couple of years of decline/incompetence until the next slave suggestion boxes are one again briefly opened? And even then likely even see things worsen further not improve. I think yes, that another 1960's Pound run is around the corner, doesn't take much for a trickle to turn into a torrent.