Opinion

  After days of insisting there’d be no backtracking on a mini-budget that sank the pound and caused panic in financial markets, the UK government has duly reversed itself. Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng confirmed on Monday that the promised cut in the top rate of income tax from 45% to 40% would be canceled. “We ...

First impressions count, especially when it comes to economic policy. UK Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng last week announced a fresh start for the country with a big shift in fiscal policy — and hit the ground face first. Their plan has crashed the pound, wrecked the government bond market, and destroyed the Bank of England’s ...

  The world looked on in horror last week as the UK’s market collapse prompted the Bank of England to reverse its plans for quantitative tightening with a spectacular intervention in the gilt market — “on whatever scale is necessary” — to save the nation’s pensions system. So far, this appears to be a uniquely British debacle. But what if ...

  This week’s bond meltdown has sent the mean 10-year borrowing cost for Group of Seven countries to its highest in more than a decade, with the average yield surging above 3%. What happens next could set the tone for financial markets and the global economy for years to come. And your guess is as bad as mine as to ...

  After a sleepy start to the North Atlantic hurricane season, Ian jolted us all awake. The storm tore through the Carolinas and beyond. But all we can see at the moment is the devastation left behind in Florida. At least 15 people have been confirmed dead, some 2.6 million homes and businesses are without power and two bridges have ...

It is said that the Conservative Party only has two modes — triumph and panic. Under Liz Truss, the new prime minister, the party has gone from the first to the second in record-breaking time (with a strange interregnum for Queen Elizabeth’s funeral). Chancellor of the Exchequer Kwasi Kwarteng’s mini-budget, or “fiscal event” as he termed it, was the worst-received ...

The credit-market bears may well be vindicated if the US enters a recession in the next year, but it’s too early to go full-scale Armageddon with predictions about corporate bond spreads. For all the economic headwinds, US corporations started the year from a position of extraordinary financial strength thanks to opportunistic refinancing in 2020 and 2021 and strong cash reserves ...

  The Bank of England recently announced that it would enter the market to buy government bonds (known as gilts) with a remaining maturity of 20 years or more. Although the central bank insists that its actions are “temporary,” to restore “orderly” markets, it’s not really clear what either of those words mean. 1 It was only on Sept. 21 ...

  Those disheartened by the election campaign run by Giorgia Meloni may think that the best thing about Italy’s incoming government will be its likely transience. Hers will be the country’s 70th government since World War II. But it would be wrong to conclude that Italian leaders don’t matter. To the contrary, Europe badly needs a stable Italy capable of ...

Very few people will confess to being such loyal followers of their political party that they automatically adopt whatever positions it takes. Most voters like to think of themselves as independent: They have their own opinions on the issues, and they support candidates, not parties. People are not necessarily wrong to think like this — as the political scientists Chris ...