Do we trust the government to maintain the Energy Price Guarantee?

The_Green_Hornet

wittynamegoeshere said:

1992 was due to the anomalies of the ERM, which was stupidly flawed from the start.  It compelled governments to prop up their currency within defined limits, and speculators saw the opportunity to bet against and make massive profits as a result.

What we have now is much more fundamental - this is not a glitch but the world is starting to fundamentally doubt the credibility of the UK and its government.  Even the IMF have said the sort of things about us that they normally need to tell banana republics.

We've spent the last few decades living on borrowed money, and only got away with it because interest rates reduced over that time.  Now it's game over.

There's likely to be an unbeatable all-time winner in the ranks of shortest term as PM very soon.

I would agree with you if is was only sterling that was weakening against the dollar, but it isn't.

GingerTim

The_Green_Hornet said:

wittynamegoeshere said:

1992 was due to the anomalies of the ERM, which was stupidly flawed from the start.  It compelled governments to prop up their currency within defined limits, and speculators saw the opportunity to bet against and make massive profits as a result.

What we have now is much more fundamental - this is not a glitch but the world is starting to fundamentally doubt the credibility of the UK and its government.  Even the IMF have said the sort of things about us that they normally need to tell banana republics.

We've spent the last few decades living on borrowed money, and only got away with it because interest rates reduced over that time.  Now it's game over.

There's likely to be an unbeatable all-time winner in the ranks of shortest term as PM very soon.

I would agree with you if is was only sterling that was weakening against the dollar, but it isn't.

Though sterling is weakening against everything, not just the dollar.

wittynamegoeshere

There's truth in both of the above statements.  Many countries are having issues, but we're probably the worst of them.

[Deleted User]

....even without sterling weakening, the BoE is going to have to massively hike interest rates to control inflation. It needs to take the money out of the economy the chancellor has just put in. Sterling may have recovered ver slightly this evening but this whole sorry situation has a long, long way to go. What we're seeing is what happens when someone in a position of power surrounds themself with people who tell them what they want to hear. It will be fascinating to see what happens at the Tory conference - will they rally round to defend their new leader or will the party implode?

One way or the other, my money is on the EPG (or a similar scheme that does much the same thing) staying in place. The gov't didn't introduce it to be nice or because of political idealism (it goes against the grain). There really was no choice - if prices had been allowed to arise in line with the ofgem cap there would have been massive problems with people unable to pay, pushing up costs even further, putting more people into trouble and unabe to pay and the whole thing would have spiralled out of control. The EPG is pretty much an economic necessity - a bit like bailing out the banks. However much it goes against the grain, there really isn't much choice but to provide some form of support while the market is made to start working again. (IMHO )

GingerTim

[Deleted User] said:

It will be fascinating to see what happens at the Tory conference - will they rally round to defend their new leader or will the party implode?

https://twitter.com/georgegrylls/status/1575119314293854209?t=k_A9UBCG9rNoaNZjG9mtsA&s=19

bristolleedsfan

[Deleted User] said:

.

One way or the other, my money is on the EPG (or a similar scheme that does much the same thing) staying in place. The gov't didn't introduce it to be nice or because of political idealism (it goes against the grain). There really was no choice - if prices had been allowed to arise in line with the ofgem cap there would have been massive problems with people unable to pay, pushing up costs even further, putting more people into trouble and unabe to pay and the whole thing would have spiralled out of control. The EPG is pretty much an economic necessity - a bit like bailing out the banks.  )

Also avoided larger suppliers possibly going bust  https://www.cityam.com/government-support-packages-rescue-ovo-energy-from-financial-turmoil/

Getting_greyer

Why U-turn the EPG when you can simply find more efficiency savings in an emaciated public sector.  

Why act when you blame LOTO, EU, Russia, Biden, the self employed, employers, Corbyn, IMF, WTO, unions, teachers, bankers, students, refugees, working people, media, Marcus Rashford, progressives, the centre-right, momentum, disabled people, poor people, wealthy people, pensioners, banks, stock markets, day traders, channel 4, remainers, the red wall, employers, Muslims, the Archbishop of Canterbury, wokery, police, gangs, the green belt, courts and many, many more? 

Miser1964

A large driver for the £ slumping in value is the markets fearing a loony Labour administration. 

ariarnia

The_Green_Hornet said:

What is going on now in the currency markets is no worse that what we saw in 1992. The country (and the government) survived then and will now. If it holds its nerve that is.

As for a general strike by public sector workers. I suppose that will help balance departmental budgets by not having to pay their wages but then I can't see the unions convincing enough nurses and teachers to vote for it.

i don't know. a lot of nurses (especially band 8a) are very annoyed that with the latest pay rise they're actually worse off with their take home pay. i don't really understand but the 4% was enough to put them in the next band for pension contributions and they have to pay them backdated to the start of the year so they're paying more for their pension than they get in pay rise. 

QrizB

Miser1964 said:

A large driver for the £ slumping in value is the markets fearing a loony Labour administration. 

That's Daniel Hannan's opinion, but not one that's widely agreed with.

Pretty much all the financial talking heads say it's the combination of increased spending with reduced taxes.