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Breakingviews - Delusions of grandeur are root of Britain s chaos

10/21/2022 4:05:00 PM

From Breakingviews - Delusions of grandeur are root of Britain s chaos

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From Breakingviews - Delusions of grandeur are root of Britain s chaos The mess Britain is in can be partly explained by the fact that its politicians think it is more special than it really is. Prime Minister Liz Truss and her short-lived “Trussonomics” came hot on the heels of Brexit. Both are symptoms of a country that hasn’t fully come to terms with the loss of its empire. If the United Kingdom now realises it can’t defy the laws of economics and geopolitics, it may emerge wiser albeit weaker. That’s admittedly a big “if”. current account deficitRegister now for FREE unlimited access to Reuters.comTruss’s folly doesn’t stand in isolation. It is an example of “cake-ism” – the view that Britain could “have its cake and eat it”, an English expression which means one can enjoy the good parts of something without the bad ones. accordingGHOSTS OF EMPIREThe Brexiters said Britain could forge its own relations with the United States, China and other countries. After all, it is a military power with nuclear weapons and a permanent seat on the United Nations Security Council. It is also the leader of the Read more:
Reuters » Breakingviews - Breakingviews: Britain’s next leader will be on a short leash Breakingviews - Britain’s bond crisis reverses over the government: podcast Biden says America’s partnership with Britain is strong despite the Truss chaos. Breakingviews - Breakingviews: Zooming car sales will hit China’s growth limit

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Shares plummeted 25% in premarket trading after Snapchat’s parent company said it was operating on an assumption there would be no revenue growth in the current quarter. Read more >> Breakingviews - Breakingviews: Britain’s next leader will be on a short leashLiz Truss has earned a footnote in the history books. The British leader on Thursday after just 44 days in charge, making her the country’s shortest-serving prime minister ever. Failed policies and a deeply unpopular party will keep her successor on a tight leash. pfft Breakingviews - Britain’s bond crisis reverses over the government: podcastNew finance minister Jeremy Hunt has scrapped most of his predecessor’s unfunded tax cuts, scuppering Prime Minister Liz Truss’s growth plan. In this Viewsroom podcast, Breakingviews columnists debate what the U-turn means for markets – and whether Truss can survive. Enjoying the title of British Prime Minister Hi new lady leader how the world moved think Biden says America’s partnership with Britain is strong despite the Truss chaos.'She was a great partner on Russia and Ukraine,' President Biden said of Liz Truss, the departing British prime minister. 'And the British are going to solve their problem.' Breakingviews - Breakingviews: Zooming car sales will hit China’s growth limitAutomakers are hitting China’s growth limit. The industry achieved four consecutive months of double-digit growth in September when deliveries reached 2.3 million, 33% higher than a year earlier, per the China Association of Auto Manufacturers. But temporary government incentives greased sales, which could pull forward demand. Breakingviews KatrinaHamlin This is weird. The commentary doesn't seem to recognize the reason for the reduction in IC engine sales is the increase in EV engine sales. One is replacing the other. Which is the desired outcome. Clothing designer pays tribute to Mexican roots through her fashion brandA fashion designer takes inspiration from her Mexican roots for her luxury clothing brand. Clothing designer pays tribute to Mexican roots through her fashion brandA fashion designer takes inspiration from her Mexican roots for her luxury clothing brand. The immediate cause of the chaos Truss unleashed was her failure to heed the advice of her hero Margaret Thatcher.Breakingviews: Britain’s next leader will be on a short leash By Peter Thal Larsen British Prime Minister Liz Truss announces her resignation, outside Number 10 Downing Street, London, Britain, October 20, 2022..Updated 12:46 p. The former prime minister once declared “there is no way one can buck the market”. Truss, who has resigned in humiliation, thought she could borrow yet more money while inflation is high, global interest rates are rising and Britain is running a big current account deficit with the rest of the world. The British leader announced her resignation on Thursday after just 44 days in charge, making her the country’s shortest-serving prime minister ever. Truss might have got away with large tax cuts and a big increase in spending if central banks were still flooding the global economy with cheap money. She might also have got away with it if the pound was still a vital reserve currency. Truss will stay in office until the Conservative Party chooses a replacement by the end of next week. But the days when Britannia ruled the waves – and sterling ruled the markets – are long gone. “But, look, she was a great partner on Russia and Ukraine. Now new finance minister Jeremy Hunt is ripping up her economic plans to balance the budget. That U-turn explains why government bond and foreign exchange markets largely shrugged off news of her resignation. Register now for FREE unlimited access to Reuters.com Register CAKE OFF Truss’s folly doesn’t stand in isolation. Still, the next few weeks will be turbulent. It is an example of “cake-ism” – the view that Britain could “have its cake and eat it”, an English expression which means one can enjoy the good parts of something without the bad ones. Boris Johnson, Truss’s predecessor, notoriously peddled cake-ism in the Brexit referendum. Underlying all this is the corrosive effect of Brexit. “The United States and the United Kingdom are strong allies and enduring friends — and that fact will never change,” Mr. He promised that Britain could enjoy the benefits of the European Union’s single market without having to be a member of the EU or follow its rules. The folly of Brexit, which I campaigned against, has played a role in the subsequent madness. Yet no aspiring leader dares confront this fact. Its supporters maintained leaving the EU would put rocket boosters under the UK economy. It has done exactly the opposite, cutting the size of the economy by over 5%, according to the Centre for European Reform. Register now for FREE unlimited access to Reuters. But Brexit supporters, and zealous converts such as Truss, refused to accept that it was a mistake. government as we work together to meet the global challenges our nations face. They concluded that the problem was poor implementation and so it was necessary to cut taxes, among other things, to fuel a dash for growth. They will have little choice but to endorse the spending cuts and higher taxes that new finance minister Jeremy Hunt is due to present on Oct. GHOSTS OF EMPIRE Brits narrowly voted to leave the EU in the 2016 referendum for many reasons. One was the rise of nationalistic populism in much of the West following the global financial crisis, which also fuelled Donald Trump’s victory in the 2016 U. According to the BBC , Hunt will not be a candidate for the leadership, potentially strengthening his grip on his current job.S. presidential election. But any serious rebellion would risk bringing down the government and triggering an early election. Truss’s tax policies, which rocked global markets. But delusions of grandeur meant this global phenomenon played out in the UK in a specific way. Advocates of Brexit spouted the myth that the UK was so special that it didn’t need the EU for either geopolitical or economic reasons. Fear of an electoral wipeout may therefore prevent the Conservatives from further self-destruction. Voters were susceptible to this magical thinking in part because they hadn’t recognised the UK’s diminished status. The Brexiters said Britain could forge its own relations with the United States, China and other countries. Only a national election can restore political stability. After all, it is a military power with nuclear weapons and a permanent seat on the United Nations Security Council. Mr. It is also the leader of the Commonwealth , a group of 56 nations most of which were previously part of the British Empire. Bar chart showing the tenure lengths of British prime ministers since 1970. Brexiters also said Britain, which was then the world’s fifth largest economy, could cut its own trade deals across the world. America, India and maybe even China would open their markets to British services, goods and entrepreneurs. 20, little more than six weeks after winning the contest for leadership of the Conservative party. Much of this was delusional. While the UK was a member of the EU, it acted as a bridge between the United States and Europe. The announcement came days after turmoil in the bond market forced Truss to reverse drastic tax cuts and replace the country’s finance minister. The situation in Britain has prompted concerns among Biden administration officials about the potential for a similar type of meltdown in the United States. Britain had clout in Washington because of its influence in Brussels – and vice versa. True, it has played an important role in solidifying the Western alliance following Russia’s invasion of Ukraine. “I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative party. But its underlying power has been damaged. Trade deals have also proved elusive. By 1430 GMT the pound was trading at $1. America is unenthusiastic, India is proving hard to nail down and China is nowhere to be seen. Mr. The folly of cutting Britain off from the EU is even more evident today, when geopolitical tension is rising and globalisation has taken a knock.S. BRITAIN’S MANY STRENGTHS Observers such as former U.S. Yields on 10-year government bonds were at 3. Treasury Secretary Lawrence Summers have described Britain as a bit like an . This is over the top. Register now for FREE unlimited access to Reuters. Truss, Johnson and Brexit have certainly damaged the UK, but haven’t totally wrecked the country. The UK is still fairly pragmatic and entrepreneurial. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. It has a smaller proportion of .