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Are we learning the wrong lesson from the mini budget crisis?

17th November 2022

Commenting on the Autumn Statement, Head of Multi Asset Trevor Greetham said:

“Are we in danger of learning the wrong lesson from the mini budget crisis? September’s gilt market meltdown was caused by a policy tug-of-war, with proposed tax cuts working against the Bank of England as they raised rates to counter double-digit inflation. Gilt yields have since dropped sharply, but the prospect of significantly tighter fiscal policy, as high interest rates take effect, risks a long recession, with knock on damage to real consumer incomes, property markets and domestically-focused stocks.

“The best way to deal with a high debt burden is to grow your way out of it. Public investment should be protected and the government should explore ways to improve the UK’s woeful export performance.”

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The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.