The pound's latest collapse is a symptom, but Britain's decline has been going on for years 🔍 Analysis from michael2day
On Monday in Birmingham, on the fringes of Conservative Party conference, a group of free-market acolytes of the sort that helped Britain get where it is today will meet for a discussion called, with no shred of irony, “Reaping the Brexit Dividend”.
, which sunk the pound, threatened pension funds, and saw Britain’s borrowing costs soar above those of EU weak links like Greece and Italy? Mr Kwarteng has expressed his scepticism of economic forecasting. His belief in supply-side theory will brook no argument.. But its slide against major currencies, accelerated by Britain’s decision to leave the European Union in 2016, has – with the odd zig-zag – been going on for years.
By 2023, Britain will be the worst-performing major economy, apart from sanctions-hit Russia, among the 38-member Organisation for Economic Cooperation and Development. An OECD report this summer listed interest rates and reduced trade as two of the main challenges facing the UK. This was before last week’s train wreck mini-Budget, which will cause interest rates to rise further and faster, and raise the price of the imports we rely on.
The pound isn’t the dollar. Times have changed. And to take such a risk without even the Office for Budget Responsibilty’s assessment for such a gamble scared investors. Dario Perkins, a managing director at TS Lombard international financial analysts, noted: “The problem isn’t that the UK budget was inflationary. It’s that it was moronic.”