UK economy ‘now comparable to Greece and Italy’

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Liz Truss has repeatedly tried to blame global factors on the UK’s economic turmoil since last month’s mini budget. (PENNSYLVANIA)

Lenders now view Britain’s economy as comparable to that of Greece and Italy thanks to the Liz Truss turmoil, a former Bank of England executive has said.

Former Deputy Governor Sir Charles Bean said the UK was no longer on par with stronger economies such as the US and Germany.

Sir Charles cited Truss and Kwasi Kwarteng’s disastrous ‘growth plan’, announced in the mini budget 23 days ago, which caused major economic turbulence amid market concerns over the impact of the unpaid tax giveaway funded by £43 billion from public finances.

Since the mini-budget, Truss has repeatedly claimed that global factors such as the Ukraine crisis are ultimately responsible for the UK’s economic chaos.

Sir Charles, however, dismissed this on Sky’s Sophy Ridge Sunday program.

“Frankly, I think it’s dishonest to say that this is all a global phenomenon,” he said. “It’s not.”

Watch: Timeline: Liz Truss’ turbulent time as Prime Minister

He specified that there is indeed a global element, with a general level of interest rates up 3% since the beginning of the year.

But he continued: “Three-quarters of that, maybe two-thirds, is the world and what’s happening in Ukraine – but the rest is a UK-specific phenomenon and it’s been particularly developed since the mini-budget, so it’s clearly guided by that in my opinion.

“Basically, we’ve gone from a proposition not too dissimilar to the US or Germany to lend to, to a proposition that’s more like Italy and Greece.

Prime Minister Liz Truss during a press conference in the Briefing Room in Downing Street, London.  Picture date: Friday October 14, 2022.

Liz Truss is under enormous pressure after just 40 days in office. (PENNSYLVANIA)

With his government in crisis, Truss sacked Kwarteng on Friday, appointing Jeremy Hunt as his successor – the UK’s fourth different chancellor in four months.

Then, in a series of interviews on Saturday, Hunt effectively trashed the policies that brought Truss to power last month.

He is now preparing a new budget plan – in fact a full budget – for October 31 in a bid to restore some order to Truss’s administration.

Read more: Jeremy Hunt refuses to say Liz Truss is a ‘confident leader’ who ‘has a grip on the country’

But Sir Charles warned: “It’s not just about changing the identity of the Chancellor… it’s actually the content and the way the numbers add up.

“The bottom line will be that whatever comes out in a few weeks is consistent and that the markets see that there is a viable and plausible plan for everything to fit together.”

On Sunday, Hunt warned of ‘tough decisions’ and new ‘efficiencies’ for all departments, but declined to go into detail about potential new cuts or promises that could be cut in the purpose of saving money.

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