November 30, 2022

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Truss sacked finance minister on Friday
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New chancellor Hunt warns of tough decisions
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'I’ve listened, I get it', Truss says
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BoE's Bailey says agrees with Hunt on need to fix finances
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Some Conservative lawmakers say Truss will be ousted
(Adds Truss article, Sunday papers)
By Michael Holden and Alistair Smout
LONDON, Oct 15 (Reuters) – Britain's new finance minister Jeremy Hunt said on Saturday some taxes would go up and tough spending decisions were needed, saying Prime Minister Liz Truss had made mistakes as she battles to keep her job just over a month into her term.
In an attempt to appease financial markets that have been in turmoil for three weeks, Truss fired Kwasi Kwarteng as her chancellor of the exchequer on Friday and scrapped parts of their controversial economic package.
With opinion poll ratings dire for both the ruling Conservative Party and the prime minister personally, and many of her own lawmakers asking, not if, but how Truss should be removed, Truss is relying on Hunt to help salvage her premiership less than 40 days after taking office.
In an article for the Sun newspaper published late on Saturday, Truss admitted the plans had gone "further and faster than the markets were expecting".
"I’ve listened, I get it," she wrote. "We cannot pave the way to a low-tax, high-growth economy without maintaining the confidence of the markets in our commitment to sound money."
She said Hunt would lay out at the end of the month the plan to get national debt down "over the medium term".
But, the speculation about her future shows no sign of diminishing, with Sunday's newspapers rife with stories that allies of Rishi Sunak, another former finance minister who she beat to become leader last month, were plotting to force her out within weeks.
On a tour of TV and radio studios, Hunt gave a blunt assessment of the situation the country faced, saying Truss and Kwarteng had made mistakes and further changes to her plans were possible.
"We will have some very difficult decisions ahead," he said. "The thing that people want, the markets want, the country needs now, is stability."
The Sunday Times said Hunt would rip up more of Truss's original package by delaying a planned cut to the basic rate of income tax as part of a desperate bid to balance the books.
According to the newspaper, Britain's independent fiscal watchdog had said in a draft forecast there could be a 72 billion pound ($80 billion) black hole in public finances by 2027/28, worse than economists had forecast.
Truss had won the leadership contest to replace Boris Johnson on a platform of big tax cuts to stimulate growth, which Kwarteng duly announced last month. But the absence of any details of how the cuts would be funded sent the markets into meltdown.
She has already ditched plans to cut tax for high earners, and said a levy on business would increase, abandoning her proposal to keep it at current levels. But a slump in bond prices after her news conference on Friday still suggested she had not gone far enough.
'MEETING OF MINDS'
Kwarteng's Sept. 23 fiscal statement prompted a backlash in financial markets that was so ferocious the Bank of England (BoE) had to intervene to prevent pension funds being caught up in the chaos as borrowing costs surged.
BoE Governor Andrew Bailey said he had spoken to Hunt and they had agreed on the need to repair the public finances.
"There was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that," Bailey said in Washington on Saturday. "Of course, there was an important measure taken yesterday."
He also warned that inflation pressures might require a bigger interest rate rise than previously thought due to the government's huge energy subsidies for homes and businesses, and its tax cut plans.
Hunt is due to announce the government's medium-term budget plans on Oct. 31, in what will be a key test of its ability to show it can restore its economic policy credibility.
He cautioned spending would not rise by as much as people would like and all government departments were going to have to find more efficiencies than they were planning.
"Some taxes will not be cut as quickly as people want, and some taxes will go up. So it's going to be difficult," he said. He met Treasury officials on Saturday and will hold talks with Truss on Sunday to go through the plans.
'MISTAKES MADE'
Hunt, an experienced minister and viewed by many in his party as a safe pair of hands, said he agreed with Truss's fundamental strategy of kickstarting economic growth, but he added that their approach had not worked.
"There were some mistakes made in the last few weeks. That's why I'm sitting here. It was a mistake to cut the top rate of tax at a period when we're asking everyone to make sacrifices," he said.
It was also a mistake, Hunt said, to "fly blind" and produce the tax plans without allowing the independent fiscal watchdog, the Office for Budget Responsibility, to check the figures.
The fact that Hunt is Britain's fourth finance minister in four months is testament to a political crisis that has gripped Britain since Johnson was ousted following a series of scandals.
Hunt said Truss should be judged at an election and on her performance over the next 18 months – not the last 18 days.
However, she might not get that chance. During the leadership contest, Truss won support from less than a third of Conservative lawmakers and has appointed her backers since taking office – alienating those who supported her rivals.
The appointment of Hunt, who ran to be leader himself and then backed Sunak, has been seen as a sign of her reaching out, but the move did little to placate some of her party critics.
"It's over for her," one Conservative lawmaker told Reuters after Friday's events.
($1 = 0.8953 pounds)
(Reporting by Michael Holden, Alistair Smout and William Schomberg Editing by Emelia Sithole-Matarise, Helen Popper, Ros Russell and Diane Craft)
Turkey's main opposition group said on Friday it would ask the top court to throw out new media legislation that would jail people for spreading "misinformation", calling the measures unprecedented censorship. Parliament adopted the law late on Thursday after it was proposed by President Tayyip Erdogan's ruling AK Party (AKP), which says it aims to regulate online publications, protect the country and combat disinformation. The bill had drawn criticism from Turkey's Western allies and rights groups who said its vague reference to "false or misleading information" can be interpreted differently by courts to punish those critical of the government.
It started out simply enough: British pension schemes were looking for a way to match their assets to future pension payments. Schemes run for pharmacy Boots and bookseller WHSmith were early adopters in the 2000s of an investment strategy of dumping stocks for bonds, to shield themselves from interest rate changes. But fifteen years later, the strategy now adopted by nearly two-thirds of pension schemes has ended up revolving around financial derivatives rather than just bonds – injecting a growing amount of risk to schemes that is only now becoming apparent as interest rates surge.
Invading Russian forces attacked Dnipropetrovsk Oblast with various types of weapons overnight on Oct. 14, including Iranian Shahed-136 kamikaze drones, head of the oblast’s military administration Valentyn Reznichenko said in a Telegram messenger post.
The parts that are being considered for sale include a stake in the SIX Group, which runs the Zurich stock exchange, an 8.6% holding in Madrid-based tech company Allfunds, two specialist Swiss banks, Pfandbriefbank and Bank-Now and Swisscard, a joint venture with American Express, the newspaper added. "We will update on progress on our comprehensive strategy review when we announce our third-quarter earnings," Credit Suisse told Reuters in an emailed statement. The hotel could be worth 400 million Swiss francs, as reported by finance blog Inside Paradeplatz early this month.
The Senior Citizen’s League says there ‘may be no COLA payable in 2024.'
Elon Musk says that his company SpaceX cannot fund Starlink services in Ukraine in perpetuity because it’s too expensive. In a tweet on Friday Musk claimed the “burn is approaching $20 million a month”. In the aftermath of the Russian invasion of Ukraine in late February, SpaceX transferred Starlink terminals, the satellite-powered distributed internet service operated by SpaceX, in part to help keep Ukraine’s military defend itself against the invasion by its nuclear-armed and territorially ambitious neighbor.
The economist warned in 2006 that the U.S. housing bust would cause a financial crisis. Now he has a new economic doomsday prediction, and it isn't pretty.
Republican Rep. Lauren Boebert took to Twitter to criticize Democrat Alexandria Ocasio-Cortez, after the New Yorker was heckled at her own town hall this week.
The CEO of Tesla and SpaceX does not digest leaks related to the Starlink service provided to Ukraine at war against Russia.
Most retired workers depend on multiple streams of income during their retirement. Two of the most common such income streams are Social Security and pensions. If we look at pension vs. Social Security income, we find significant differences. Retired workers … Continue reading → The post Pension vs. Social Security: Key Differences appeared first on SmartAsset Blog.
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