Discover and read the best of Twitter Threads about #MiniBudget
Most recents (18)
Are we potentially facing "Austerity 2.0" in the #AutumnStatement because of the fallout from the #MiniBudget?
Or is it because of economic forces beyond the UK, such as the energy crisis and rising *global* interest rates?
Explanatory chart thread 🧵...1/
Or is it because of economic forces beyond the UK, such as the energy crisis and rising *global* interest rates?
Explanatory chart thread 🧵...1/
...To attempt an answer, go back to the last set of official forecasts we had from the @OBR_UK back in March.
The government was then projected to be borrowing around ÂŁ32bn in 2026-27 (the final year of the forecast period) and to be *meeting* its fiscal rules...2/
The government was then projected to be borrowing around ÂŁ32bn in 2026-27 (the final year of the forecast period) and to be *meeting* its fiscal rules...2/
...The @resfoundation (similar to other forecasters) now expects borrowing in that year to be around ÂŁ90bn and for the government to *break* its fiscal rules.
So what’s driving that £58bn projected increase in borrowing?...3/
So what’s driving that £58bn projected increase in borrowing?...3/
The media is awash with talk of a “fiscal hole” that needs to be filled with tax rises/spending cuts in next week's #AutumnStatement.
But what is this "fiscal hole" & how worried should we be about it?
A thread... 🧵1/
But what is this "fiscal hole" & how worried should we be about it?
A thread... 🧵1/
...The first thing to stress is that it’s NOT some kind of hard financial limit on government spending or borrowing, which, if breached, means disastrous things automatically happen...2/
...Rather, it’s a measure of how far off course the government is from meeting its own fiscal rules, the main plank of which has been to have the national debt falling as a share of the overall economy in three years' time, implying the financial year 2025-26...3/
Here's the Treasury costings for the #MiniBudget
Around ÂŁ45bn of tax cuts by 2026-27.
Abolition of additional rate of income tax already axed - reduction of ÂŁ2bn from that total.
If there is a further tax cut U-turn today, what could go next?...
Around ÂŁ45bn of tax cuts by 2026-27.
Abolition of additional rate of income tax already axed - reduction of ÂŁ2bn from that total.
If there is a further tax cut U-turn today, what could go next?...
...speculation about corporation tax move reversal - would mean reduction of ÂŁ18bn in cost of #miniBudget (blue)
But National Insurance cut has already gone through MPs this week, signalling ÂŁ15bn (green) unlikely to be recouped...
But National Insurance cut has already gone through MPs this week, signalling ÂŁ15bn (green) unlikely to be recouped...
...and bear in mind that @TheIFS has estimated the fiscal hole that needs to be filled by 2026-27 to get debt falling as a share of GDP at ÂŁ62bn & stressed that even if the Chancellor now reversed *all* his #MiniBudget tax cuts it wouldn't be enough to fill it...
MEGA 🧵
@TrussLiz & @KwasiKwarteng: the real impact of your #MiniBudget
We commissioned @Survation to run an MRP poll to break down the devastating consequences of the Govt’s disastrous mini budget on people across the country's 632 constituencies.
Follow for the results 👇
@TrussLiz & @KwasiKwarteng: the real impact of your #MiniBudget
We commissioned @Survation to run an MRP poll to break down the devastating consequences of the Govt’s disastrous mini budget on people across the country's 632 constituencies.
Follow for the results 👇
FIRST, let's look at the national #CostOfLiving picture:
🏠25% of people across the country fear 🚨homelessness🚨 within a year.
This rises to a staggering 37% for families with 2 or more children.
🏠25% of people across the country fear 🚨homelessness🚨 within a year.
This rises to a staggering 37% for families with 2 or more children.
đź›’ 60% of people across the country are already cutting back on grocery essentials.
And yet:
🥫 27% fear they'll need to use a food bank within a year.
This rises to 30% for people in full-time work. This crisis is very much impacting working people.
And yet:
🥫 27% fear they'll need to use a food bank within a year.
This rises to 30% for people in full-time work. This crisis is very much impacting working people.
[thread]
It is the 5th October 2022 at #CPC2022
It is the day of @10DowningStreet @trussliz closing speech to conference
So I added an extra column to this to cover the *EXTRA* range of bullshit spaffed by Tories to deflect from the #minibudget
let's go through them
It is the 5th October 2022 at #CPC2022
It is the day of @10DowningStreet @trussliz closing speech to conference
So I added an extra column to this to cover the *EXTRA* range of bullshit spaffed by Tories to deflect from the #minibudget
let's go through them
1. we "didn't lay the ground properly"
No you deliberately chose not only not to get the OBR to assess the mini budget
BUT YOU DID NOT EVEN PRESENT IT TO FUCKING CABINET
No you deliberately chose not only not to get the OBR to assess the mini budget
BUT YOU DID NOT EVEN PRESENT IT TO FUCKING CABINET
2. It is a coup
Errr
No
It isn't
A reminder - previous Prime Minister Boris Johnson when asked about a literal insurrection said:
"I have no knowledge of what happened"
Errr
No
It isn't
A reminder - previous Prime Minister Boris Johnson when asked about a literal insurrection said:
"I have no knowledge of what happened"
Idea the UK bond market crash since last Friday is due to size of energy support package is difficult to square with the fact the UK wholesale gas price is now 321p per therm - lower than the 410p it was on 8 September when the plan was confirmed...
...the UK gas futures curve has also shifted down - which implies the cost of the package could turn out to be substantially *cheaper* than initially feared, as explained here...
...so somewhat implausible that it would be this part of the package on Friday which has spooked markets.
Also woth noting that even on the *higher* projections of the cost of the energy support package (ÂŁ150bn - yellow bars below) it's a *temporary* cause of higher borrowing...
Also woth noting that even on the *higher* projections of the cost of the energy support package (ÂŁ150bn - yellow bars below) it's a *temporary* cause of higher borrowing...
There are a couple of editorials today from the Wall Street Journal - wsj.com/articles/the-u… & @Telegraph that suggest financial markets do not understand the policy pivot now being undertaken in the U.K. A 🧵from someone who actually writes sell side economics research (1/n)
There are quite a number of pro supply side initiatives in #minibudget2022 worthy of positive appraisal. Accelerating key infrastructure planning approval, abolishing bonus cap & increasing work search conditionality/work coach engagement. đź‘Ť
On personal & corporate tax changes - the evidence that these (that are largely reversals of recent increases) can improve the performance of the U.K. supply side is unproven. Hard to argue (credibly) to clients that this helps support a trend growth uplift to 2.5%.
đź’· In a radical package of tax cuts, Chancellor Kwasi Kwarteng has:
đź”´ Brought forward a cut to the basic rate of income tax cut
đź”´ Slashed National Insurance contributions
đź”´Abolished additional rate of income tax
How much will #MiniBudget save you?
telegraph.co.uk/tax/news/calcu…
đź”´ Brought forward a cut to the basic rate of income tax cut
đź”´ Slashed National Insurance contributions
đź”´Abolished additional rate of income tax
How much will #MiniBudget save you?
telegraph.co.uk/tax/news/calcu…
📰 Mr Kwarteng announced that the 1pc cut to the basic rate of income tax – first announced by former Chancellor Rishi Sunak – will be brought forward by one year
telegraph.co.uk/tax/news/calcu…
telegraph.co.uk/tax/news/calcu…
đź“° This means that from April 2023, basic-rate taxpayers will pay 19pc in income tax, down from 20pc.
According to Mr Kwarteng this works out as an average tax saving of ÂŁ170 next year for 31 million people
telegraph.co.uk/tax/news/calcu…
According to Mr Kwarteng this works out as an average tax saving of ÂŁ170 next year for 31 million people
telegraph.co.uk/tax/news/calcu…
From taxpayers allegedly footing Johnson's legal bills, to the cost of living crisis - here’s what we’ve been working on this week 👀
Remember when Jacob Rees-Mogg went to visit the Queen to prorogue Parliament?
We've written to the PM's lawyers because it appears that the evidence Number 10 gave to the Court in the prorogation case is not true.
glplive.org/accountability…
glplive.org/accountability…
Huge tax cuts and a borrowing surge: The Chancellor has opted to boost short term growth and interest rates while setting the public finances on an unsustainable path – here are five key takeaways from today’s #MiniBudget – THREAD
1 - £45 billion of tax cuts were announced today – going far beyond election promises to cancel corporation tax increases and reverse this year’s National Insurance rise.
These are the largest tax cuts to be announced in a single fiscal event since the 1970s.
Looking forward to an insightful discussion on the impact of today's #MiniBudget on government's the #Environment, #NetZero and wider #ClimateChange policies #GAEvent
Beginning looking at the economic outlook, @SamAlvis2 warns that the ÂŁ has dropped in response to today's mini budget, and that we can expect a recession to be "looming" #GAEvent
Huge tax cuts and a borrowing surge: The Chancellor has opted to boost short term growth and interest rates while setting the public finances on an unsustainable path – here are five key takeaways from today’s #MiniBudget – THREAD🧵
1 - £45 billion of tax cuts were announced today – going far beyond election promises to cancel corporation tax increases and reverse this year’s National Insurance rise. These are the largest tax cuts to be announced in a single fiscal event since the 1970s.
2 - A record increase in borrowing: The decision to combine the largely unavoidable higher deficit caused by rising energy prices/interest rates with permanent tax cuts will drive up borrowing by ÂŁ411 billion in coming years. No Chancellor has increased borrowing by so much.
🗣️In this morning’s #MiniBudget, the Chancellor announced the Government’s intentions to establish up to 38 Investment Zones with tax breaks for businesses.
🗨️Read on for an immediate response from Director of Policy and Research @Paul_Swinney.
#InvestmentZones
#GrowthPlan
👇👇
🗨️Read on for an immediate response from Director of Policy and Research @Paul_Swinney.
#InvestmentZones
#GrowthPlan
👇👇
1/ Successful investment zones will need to house high-productivity firms that offer well-paying jobs for skilled workers.
2/ Focusing on cutting regulation and tax cuts in struggling regional economies will make them even cheaper but not necessarily more attractive places to do business.
🚨 NEW from JRF:
This is a #MiniBudget that has wilfully ignored families struggling through a cost of living emergency and instead targeted its action at the richest.
It leaves those on the lowest incomes out in the cold with no extra help to get them through the winter. 🧵
This is a #MiniBudget that has wilfully ignored families struggling through a cost of living emergency and instead targeted its action at the richest.
It leaves those on the lowest incomes out in the cold with no extra help to get them through the winter. 🧵
Families on low incomes can’t wait for the promised benefits of economic growth to trickle down into their pockets.
The energy price cap fixes bills at a level already unaffordable for many and was never going to be enough to solve the problem for those on the lowest incomes.
The energy price cap fixes bills at a level already unaffordable for many and was never going to be enough to solve the problem for those on the lowest incomes.
The Government should have combined its decision to put money into the pockets of high earners with a decision to increase benefits early.
Those on the lowest incomes have already run out of options – forced to cut back on food and energy, go into debt and into arrears.
Those on the lowest incomes have already run out of options – forced to cut back on food and energy, go into debt and into arrears.
Gilt yield increases & GBP weakness a rational reaction to clear market of >ÂŁ60bn new issuance required to fund #MiniBudget in 22/23. 3 areas HMT staff will be briefing Chancellor about over coming months: 1) Market reaction; 2) Intergenerational impact; 3) Behavioural response
Market reaction determines gross cost of these measures as they are entirely funded, initially, by borrowing. As Gilt yields rise there is a double squeeze - potential APF losses, & the Gilt refinancing cycle. Weak GBP will also raise RPI interest on ÂŁ600bn of index-linked Gilts
Intergenerational transfers. #minibudget takes consumption from future to fund resources today. Given what we know about today's beneficiaries (older demographics) then analysis should assess degree to which fiscal activism (contentious macro) reinforces generational inequality
Wow! In macro-economic terms that is a very substantial 'give-away' mini-budget. In the teeth of the Global Financial Crisis CX Darling put just over ÂŁ21bn into the economy with a temp VAT cut (progressive) the headline. Today's (and May's) announcements inject ÂŁ77.2bn in 3yrs /1
That is a bold gambit to boost the economy and emphasises the gravity of the situation. But does it just park the problem onto the future? fuel the inflation crisis? put greater pressure on interest rates? raise government borrowing costs as fiscal prudence is now gone? /2
What is not in doubt is that the poorest in society have not been helped directly in this mini-budget. Measures on benefits will have to follow and urgently. This is a major concern. This is doubling down on the 1980's trickle down economics that the US President just rejected /3
The reversal of the National Insurance rise, announced by the Chancellor yesterday, will primarily benefit those who need help the least...
The poorest tenth of households will gain just ÂŁ11.50 this year, while the top 10% will on average gain 60 times that amount...
and twice as much of the permanent gains will go to the richest 5 per cent of households as the entire bottom half of the income distribution.
When Kwasi Kwarteng steps up to the despatch box at around 9:30am, he will set the course for the economy for the next few years. What will he say?
Follow the latest updates on the mini-Budget, with analysis and commentary from our politics team. 👇
newstatesman.com/politics/2022/…
Follow the latest updates on the mini-Budget, with analysis and commentary from our politics team. 👇
newstatesman.com/politics/2022/…
Kwarteng trained as an economic historian, but he is much more of a historian (and a classicist) than an economist.
Kwarteng is likely to rely on his own analysis of history to guide him at the Treasury, writes @harrytlambert.
newstatesman.com/politics/conse…
Kwarteng is likely to rely on his own analysis of history to guide him at the Treasury, writes @harrytlambert.
newstatesman.com/politics/conse…
@harrytlambert The Conservative chair of the Treasury Select Committee, Mel Stride MP, has told @willydunn that the Treasury is withholding an Office for Budget Responsibility report that would give MPs and financial markets crucial insights into the “mini-Budget”.
newstatesman.com/economy/2022/0…
newstatesman.com/economy/2022/0…
