The Bank of England just exacerbated the catastrophe caused by Kwarteng’s mini budget

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The Bank of England (BoE) and the International Monetary Fund (IMF) have both expressed continuing concern at Kwasi Kwarteng’s mini-budget. As the Canary’s Steve Topple explained:

After the Tories announced the package, the value of the pound collapsed, mortgage lenders pulled countless rates, and the Bank of England had to step in to save pension funds. But that wasn’t the end of it, even after Truss’s now-infamous U-turn. By Thursday 6 October the pound sunk again against the dollar after a credit rating agency warned of further problems with the UK economy.

A few days later, and the BoE are being urged to intervene yet again. As the Guardian reported:

The Bank of England is facing growing calls to extend its emergency intervention in financial markets triggered by Kwasi Kwarteng’s mini-budget, amid concerns over the impact on struggling pension funds.

However, Andrew Bailey – governor of the BoE – stated that they couldn’t intervene any further on pension funds, bluntly saying:

You’ve got three days left now and you’ve got to sort it out.

As he said that, the markets plummeted:

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The IMF also warned that:

Without fiscal contraction elsewhere, and with tight supply, unfunded government spending increases or tax cuts will only push inflation up further and make monetary policymakers’ jobs harder.

Deep concern

With a worsening climate crisis, an energy crisis, and more economic turmoil on the horizon, the response on social media was understandably passionate.

Economist and writer Will Hutton said:

Economic justice campaigner Richard Murphy expressed confusion and concern:

Human rights lawyer Jessica Simor was in disbelief:

Accounting professor Prem Sikka also questioned the wisdom of Bailey’s comments:

Former editor of the Financial Times Lionel Barber said:

Catastrophe

Kwarteng has hurled the country into a catastrophic situation. The fact that the BoE has had to intervene repeatedly speaks to how alarming this all is. Truss has certainly not been elected, and therefore her economic positions have not been discussed or debated amongst anyone but Conservative party members. Her government’s approach to the economy is unsanctioned chaos that doesn’t even have the consent of the electorate.

This all shows, once again, that the privileged elites who run our country are way out of touch. It’s far past time for us to push back against this feckless government. We can’t rely on politicians to do the ethical thing, or to look out for the most vulnerable people in society.

Featured image via Unsplash/Christopher Bill

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