Kwarteng’s budget has taken a hammering in the markets? Justified or an overreaction. We ask FT’s Martin Wolf and he doesn’t hold back on what he thinks.
Last week Kwasi Kwarteng delivered his ‘fiscal event’, unsupported by any analysis from the Office for Budget Responsibility. He said we wouldn’t apologise for focusing on economic growth. He’s also refused to apologise for the market response, which has seen the pound sink to a record low and the Bank of England forced to step in and buy-up bonds to stop the collapse of many pension funds, suffering from rapidly rising longer-end gilt yields.
Even if the approach was to work, is there any sense going for growth at a time when the central bank is trying to slow the economy down to subdue the rate of inflation? It’s a question Phil and Roger put to the FT’s Chief Economics Correspondent Martin Wolf.
As you’ll hear in this week’s Why Curve, it’s clear he has a great many concerns about Kwarteng’s approach to managing the economy, not least his disregard to public debt. Growth, he says, won’t be resolved by cutting taxes. And investors focus on economies that are stable; we haven’t seen any of that the last few days.
Burt what of those who say markets and commentators have over-reacted to Kwarteng’s budget. The Telegraph’s Ambrose Evans-Pritchard says all this conjecture is the “pathological catastrophism of the pro-Brussels commentariat.” Could he be talking about Martin?
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