Eurocrats celebrate ‘delusional’ UK’s economic chaos blaming Brexit

Redwood: Not in Government power to control pound

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Ms Truss said big tax cuts were the right path for Britain and refused to consider reversing the so-called “mini-budget” laid out last week. The pound was last down 0.88 percent to $1.0791 after hitting a session low of $1.0764. The euro was up 0.18 percent against sterling at 89.54 pence.

Sterling crashed to a record low against the dollar of $1.0327 on Monday after Chancellor Kwasi Kwarteng unveiled plans to slash taxes, particularly for the rich, and jack up borrowing.

The mini-budget also wreaked havoc in the UK government bond market, forcing the Bank of England (BoE) to intervene on Wednesday.

The BoE said it would buy around £65billion of long-dated government bonds after seeing “dysfunction” in the market.

Sterling bounced on Wednesday to close at $1.0877 as investors digested the BoE’s plans.

However, it resumed its long-running slide on Thursday as the Prime Minister came out to defend her government’s policies.

She told the BBC: “We are facing difficult economic times. I don’t deny this. This is a global problem. But what is absolutely right is the UK government has stepped in and acted at this difficult time.”

In the EU, Eurocrats were quick to pinpoint the economic havoc on Brexit and hail at their “Schadenfreude” – the German term used to refer to the pleasure at another’s misfortune.

Vítor Constâncio, a former vice-president of the European Central Bank told the Financial Times: “Since Brexit, the UK has shown a lot of hubris and denying reality, as if it was going back to greatness and the days of the empire.

“It’s delusional and underlines the cautionary tale that Brexit has represented, which is that going away from the European centre has been bad for the UK.

“The pound is no longer an internationally meaningful currency — it’s amazing.”

He continued: “There is Schadenfreude, yes — not pleasure, that would be too strong. But yes, the sense of ‘I told you so’ is widespread in Europe now.”

In France, Finance Minister Bruno Le Maire, asked if he was concerned about Italy’s election result, he told France Inter radio: “If there is any concern in Europe, it is around Great Britain.

“When you come out of European protection [with Brexit] and you announce £150bn of additional expenditure, you have an interest rate that jumps above 4 per cent.

“Europe provides protection and I hope that Italy participates in that protection.”

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German Finance Christian Lindner took the opportunity to defend the importance of fiscal restraint with the example of the UK.

He said: “In the UK, a major experiment is starting as the state simultaneously puts its foot on the gas while the central bank steps on the brakes.

“We must not counteract the central bank’s policy of rising interest rates by sending fiscal stimulus for demand or for growth.”

Nadia Calviño, Spain’s deputy prime finance minister used the UK crisis to speak against tax-cutting regions run by Spain’s conservative opposition party.

She said: “We’re all capable of seeing how it’s leading the country not adrift but into disaster.”

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