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Faisal Islam



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Chancellor is up - starts talking about energy crisis.. goes through the considerable help already announced. No number yet. Says Bank of England independence is “sancrosanct”

He says tax cuts will “expand the supply side of the economy”… OBR forecast by end of year… Total cost of energy package for 6 months is £60bn

On planning: “we’re getting out of the way to get Britain building” … “publishing a list of infrastructure projects that will be prioritised for acceleration, …enable forthcoming planning reforms… increase the disposal of surplus government land to build new homes”

Chancellor - Announces plan to “legislate to require unions to put pay offers to a member vote, to ensure strikes can only be called once negotiations have genuinely broken down” Reflects union success in moving straight to ballot before even starting talks to meet thresholds

Chancellor wants global banks to “create jobs here, invest here, and pay taxes here in London, not Paris, not Frankfurt, not New York” .. and will “get rid” of the bonus cap

Corporation tax rise to 25% (from 19%) cancelled which will “plough” £19bn a year back into the economy, says Chancellor

Now announcing duty rates for beer and spirits will be cancelled… Rather difficult to sustain the idea that this is not a Budget, just without independent OBR scrutiny

Stamp Duty cut! No stamp duty on £250k For first time buyers £420k stamp duty free… A permanent cut to stamp duty, effective today

Scrapped the 45p rate of tax

Basic rate cut to 19p in April…

🚨 Massive fiscal stimulus from the Government, with particular aim at higher earners. £45 billion tax cuts NI - £17bn Corp tax - £12bn (rising to £18bn) 45p tax scrapping - £2bn Income tax cut - £5bn Household energy plan - £31bn (for 6 months) Business energy - £29bn (ditto)

Growth plan has a handy chart showing how much extra revenue would be received IF there was an increase in trend growth… £47bn if increased by 1%

45bn is 2% of GDP - biggest tax cut since the Barber budget of 1972, 50 years ago. (Says IFS) Should be noted that did not have a happy ending

Two year Government borrowing gilt rates has shot up 30 basis points to 3.9%.. less than 3.5 this morning… a huge move today. was 3.1 on Tuesday, was 1.7 when Truss took lead over Sunak in August

10 year Government borrowing has just reached a 12 year high of 3.73%… was 3.3% yesterday, 1.8% at beginning of August

Well. 2 year UK Govt borrowing just hit 3.99% from 3.5 this morning, 3.1 on Tuesday… first time since September 2008 pre Lehmans levels

🚨 Biggest daily rise in 10 year yields for UK Govt borrowing (ie a 10 year loan) since 1998 Biggest daily rise in 5 year yields since 1991, up nearly half a per cent Biggest daily rise in 2 year lending since Oct 2009 (HT Reuters)

*** And although there is no OBR forecast, as I reported this week the Treasury has had to forecast for the DMO how much extra it immediately needs in financing, ie how many gilts it has to sell to meet funding - £72 billion extra in this financial year…

Sterling now down 2% versus US $ to 1.103 - a new 37 year low Euro also down just under 1% against dollar

🚨 OK Sterling in free fall now… to incredible new 37 year lows vs dollar Down to $1.089 Down to €1.12

Faisal Islam


Economics Editor, BBC. Fin crisis book @theDefaultLine .. Newsnight. Host award-winning 2016 EUref TV interviews & 2017 live GE debate. United ST.

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