Home Business News Hunt has ‘ripped up almost every policy on which Truss was elected’ and his emergency measures ‘will be temporary’

Hunt has ‘ripped up almost every policy on which Truss was elected’ and his emergency measures ‘will be temporary’

17th Oct 22 2:07 pm

Jeremy Hunt’s emergency measures to calm financial markets “will only work temporarily” as Liz Truss faces a leadership battle, which will trigger more uncertainty, warns the CEO of one of the world’s largest independent financial advisory organisations.

The warning from Nigel Green of deVere Group, which has $12bn under advisement, comes as the UK’s fourth chancellor in four months reversed on Monday almost all of the Prime Minister’s flagship economic policies set out in the mini-Budget less than a month ago.

He said, “Jeremy Hunt has ripped up almost every policy on which Liz Truss was elected just weeks ago to lead the Conservative Party and become Prime Minister.

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“Amongst other things, he has dropped the plan to cut the basic rate of income tax from 20% to 19% and has torn up the government’s two-year energy bill freeze.

“He says his measures, along with the previous decision not to cut corporation tax and the reversal of the abolition of the 45p top rate of tax, will raise £32bn per year.”

The deVere CEO added, “Markets appear reassured for now. The pound gained and gilt yields dropped as the new chancellor set out his emergency measures aimed at stabilising the extremely choppy waters of the last couple of weeks.

“However, we expect that the new measures to calm financial markets will only work temporarily.

“The massive loss of credibility cannot be regained all that rapidly. U-turns and abandoning landmark economic policy after economic policy does not inspire investor confidence and trust.

“Rather it smacks of humiliating economic incompetence.

“Now investors are sensing that Liz Truss faces a leadership challenge within days as her own colleagues, who are worried about losing their seats, plot how to remove the Prime Minister and replace her with another senior Tory.

“The Prime Minister is on course to be the UK’s shortest-serving leader in history – and this all creates further uncertainty which will be translated into heightened market volatility.”

Nigel Green concludes: “Despite Jeremy Hunt’s emergency intervention – which basically means the ripping up of the mini budget – investors sense that the recent enormous turmoil in financial markets has been inflicted by the government and was utterly avoidable.

“Although a safer pair of hands is now in charge at the Treasury, I suspect that brewing political chaos and heightening uncertainty around Liz Truss’s leadership will again trigger market jitters.”

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