Rees-Mogg attacks BBC for blaming small budgets for market chaos

A Cabinet minister accused Today presenter Mishal Husain of failing to meet the BBC’s fair standards after she blamed the small budget for recent turmoil in financial markets.

Business Secretary Jacob Rees-Mogg sought to claim that the Bank of England’s decision on interest rates caused turmoil, rather than Prime Minister Kwasi Kwarteng’s plan to borrow more to finance the tax cuts.

Husain said there was a “very serious economic picture and investor confidence that was sparked by the small budget” when she questioned the minister on BBC Radio 4’s Today programme.


BBC Radio 4 Today presenter Mishal Husain thinks the small budget has unleashed the recent turmoil in financial markets (Jeff Overs/BBC/PA)

Mr Rees-Mogg told her: “You assume something is causal, it’s a speculation.

“What has worked in retirement funds, given that some investment strategies are fairly high risk but low probability, not necessarily small budgets – it can just as easily happen back in the day, Bank of England. did not raise interest rates as much as the Federal Reserve did.

“And I think drawing a conclusion about causality is not responding to the BBC’s claim of fairness, which is more of a commentary than a factual question.”

He added: “I’m saying it’s mainly due to interest rate differentials and not financial announcements.”

But Nigel Peaple, director of policy and advocacy at the Lifetime Savings and Retirement Association, said: “The source of these problems is mainly caused by small budgets, due to the market’s reaction to the that small budget, because of the uncertainty. on government plans. “

He suggested that the market could be appeased as the Prime Minister gives more details on how he intends to manage public finances.

We are seeing bond yields rise due to so much uncertainty over the Government’s fiscal policyLucy Coutts, JM Finn

Christian Kopf, head of fixed income at German firm Union Investment, said the small budget was “absolutely” to blame.

He told Today: “The problem we are facing in the UK is the excessive current account deficit that the country is running, exporting much less than it imports, saving much less. than investment and consumption, and the country is living further away than it is meant to be.

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“The small budget that has been announced by the UK Government has only made matters worse by increasing the fiscal deficit and increasing the UK current account deficit, and it has reached the point where the investors don’t want to fund it.”

Lucy Coutts, chief investment officer at JM Finn, told the program that the Bank of England is doing its job of trying to keep inflation “very good” until the budget is small.

“This is a self-inflicted wound and that is why the market reacted in such a poor way,” she said.

“That’s why we see bond yields rising, because there’s so much uncertainty about the Government’s fiscal policy.” Rees-Mogg attacks BBC for blaming small budgets for market chaos

Fry Electronics Team

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