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Sep 28 • 3 tweets • 1 min read
Mohamed El-Erian, former Deputy Director of IMF asked what govt should do to restore credibility, absent a tax cut u-turn: "I'd look to the Bank of England to make incredible increases in interest rates and accept a much deeper recession." #Newsnight
"We are now deep in the world of third and fourth best. There is no action which doesn't have a collateral damage to it. The least bad action right now is not to go forward with the tax cuts and stabilise the economy."
Reminder again that these tax cuts are supposed to be about preventing deep recession, helping with cost of living and ensuring long term growth.

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More from @lewis_goodall

Lewis Goodall Profile picture
Sep 29
NEW: two new polls out show enormous leads for Labour.

Survation: 21 points
YouGov: 33 points.

That is wipeout territory for the Conservatives.
As I said, would be almost total wipeout for Conservatives l. Even Blair only had a 13 point lead in 1997. This would be Labour majority of over 300. Now these polls will probably settle but what will deeply concern Tory MPs is even if lead closes it’s a huge gap. Image
I’d also say that what these polls won’t reflect is the Lib Dems picking up more seats as a result of tactical voting. So situation for Conservatives may be even worse than it appears on headline polling.

You have to go back to 1998 to find a poll lead this big.
Read 12 tweets
Lewis Goodall Profile picture
Sep 29
Radio ivs brilliantly done but especially effective because of three fundamentals: 1) Truss not a good communicator 2) she doesn't have an answer to the key question- what good are tax cuts (or energy package) if their value is wiped out by the consequence of her other decisions?
3) Truss wanted to answer every question about the energy package for which she has derived almost no political credit. And that's because she changed the conversation by having the tax cuts along side it. It's too late to change it back.
Perceived (and indeed actual) incoherence is her problem everywhere right now. With voters on relationship between energy package, tax cuts, inflation and mortgage rates and with the markets which, do not buy the idea of fiscal policy and monetary policy working so at odds.
Read 4 tweets
Lewis Goodall Profile picture
Sep 28
The only public comments we’ve had from the Prime Minister over the last couple of days have all been about foreign affairs: Ukraine, Shinzo Abe and Georgia Meloni.
Normally this would not be unusual given it’s been the Labour Party conference. But there have been, well, other events happening. No 10’s belief is that by saying nothing it is confident and doesn’t reek of panic. It’s an approach with which some Conservative MPs are not happy…
Looks like the silence will be broken tomorrow am though. Am assuming it’s part of a wider local radio broadcast round, if not fair play Tees have got a hell of a get…
Read 7 tweets
Lewis Goodall Profile picture
Sep 28
NEW: Bank of England to stage QE style intervention and buy long dated UK government debt. Huge intervention. Implies that if they don’t do so and therefore restore stability “there would be a material risk to UK financial stability.”
This, in response to the response of a government fiscal event, rather than larger external shock, is extraordinary.
Huge concern in the City about risk of contagion to other markets, pension, insurance etc (hence IMF intervention).
Read 8 tweets
Lewis Goodall Profile picture
Sep 28
A reminder that we were told one of the central points of Friday was to talk about growth and stave off a severe recession. Instead we’re talking about the IMF. Effect on the economy and confidence potentially chilling.
Example: we were told PM tonight stamp duty cut essential to ensure growth. Now we’re talking about a house price fall of 10%.
And again, this isn’t necessarily about the what but instead the how. If the measures had been in a proper budget, proper OBR process, proper mid term fiscal plan we would probably be in a different place. Suggestion this is markets’ fault/a left wing IMF is risible.
Read 4 tweets
Lewis Goodall Profile picture
Sep 27
Keir Starmer arrives on stage: “We can’t go on like this. What we’ve seen in the past few days has no precedent. The govt has lost control of the British economy. And for what? They’ve crashed the pound…And for what? Not for you. For tax cuts for the richest.”
Starmer: “in their budget last week- they sent out a new message…it says your struggles, your hopes, your ambitions don’t matter to us. We are not here for you. You are not our people. We’re here for those at the top and the rest of you can shove off.”
Standing ovation for Starmer denouncing Putin’s imperialism.
Read 15 tweets

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