PM's Right...Britain Has To Wake From Its Economic Slumbers

According to Westminster gossip, Liz Truss could be out of Downing Street by Christmas and replaced by Rishi Sunak, or by a caretaker PM. The Conservatives might have had a bad week in Birmingham, but that doesn’t mean they couldn’t make things infinitely worse for themselves by staging a coup against the leader who has just been elected by the party membership.

- Ross Clark

It is true that Truss and her Chancellor, Kwasi Kwarteng, have made a bad start. The abolition of the 45p tax rate was the right idea at the wrong time – it should have waited until the Chancellor had some credible plan to reduce public debt.

Astonishingly, no government of either colour has succeeded in balancing the books in two decades. Every year the Govern- ment runs a deficit, it piles more on the debt pile. It will have to spend £83billion this year on debt interest – over half what it spends annually on healthcare.

Truss and Kwarteng need to make a priority of getting public spending under control just as David Cameron and George Osborne did when they came into office in 2010. That is what will reassure markets. Instead, Kwarteng unleashed tax cuts and refused to give details of his plans for debt until November.

All this said, it is foolish to try to blame market turmoil on the UK government alone. Stock markets and bond markets have been crashing around the world.

IF YOU THINK that the painful rises in mortgage rates facing homebuyers are just a British problem, go and speak to some US homebuyers. Interest rates are being pushed up all around the world as years of ultra-loose monetary policy are unravelling.