UK Market Mayhem
Our key coverage of the fallout from the Truss government's mini-Budget and efforts to restore market confidence
On 23rd September 2022, Kwasi Kwarteng stood up in the House of Commons to deliver a statement intended to launch the UK economy into a low-tax, high-growth future. Instead, it sparked panic and marked the beginning of one of the most calamitous periods in modern British history as investors began to price in the risk of a UK financial system meltdown.
During those tense weeks, economists from across Capital Economics’ macro and markets teams – not least its UK team – were advising clients on the potential scale of the crisis and how best to navigate the many risks suddenly presented to the UK economy and global markets. The collection of reports and recordings below represents just some of our real-time coverage of the crisis.
Watch: Does the fall of Kwasi Kwarteng mark an end to the UK’s crisis?
In the wake of the UK Chancellor’s sacking, our senior economists discussed whether the end was in sight for the political-economic crisis which has gripped the country and rocked global markets. Click here to watch it now.
Watch: Mini-Budget fallout - How bad could it get?
Economists from our UK macro and housing teams, as well as from our Markets service, held a 20-minute online briefing for clients to explain what lies ahead in the wake of the Bank of England's extraordinary intervention into the gilt market.
UK RAPID RESPONSE
Response to Bank of England gilt purchase plans
The continued fallout from the Chancellor’s mini-budget has forced the Bank of England to postpone its plan to sell some gilts and pledge to buy as many long-term gilts as needed. Even though yields fell on the news, the overall sense is that the downside risks to the UK economy are growing.
UK Economics Update
What’s needed to put public debt on a sustainable footing?
Since we’re sceptical that the tax cuts announced by Kwasi Kwarteng last week will boost long-term economic growth, fiscal policy will need to be tightened in future in order to put the public finances on a more stable path.