Talking about a UK fiscal crisis is hugely exaggerated

The Prime Minister’s energy plan is not ideal. An energy price cap of £2,500 may be high enough to discourage waste, but the benefit should not be extended to the wealthy classes.

If speed and simplicity are the necessity – and yes, there is macroeconomic value in cutting 4 percent of headline inflation in one fell swoop – then this must be offset by a solidarity tax on high income and large properties.

I preferred OVO Energy founder Stephen Fitzpatrick’s plan that limited energy subsidy to moderate consumption per household, exposing promiscuous users to market reality.

But this is for bickering. Something had to be done to prevent the pre-rebellion hysteria of July and August. The package is no worse than variants in other European states, and slightly better than some. To call the emergency spending reckless when we are at war with Putin is a complete critique of those who hate this government for other reasons.

Meanwhile, the economic scare stories circulating are vastly exaggerated. There is no run in the UK gilt market. The ten-year interest rate is 3.31 pc. in the UK, 3.18 pc. in Canada and 3.58 pc. in the U.S. Borrowing costs are lower in Europe – except Italy (4.21 pc) – but that is because core inflation is lower. The difference has nothing to do with creditworthiness.

German Bund yields have also risen by more than 100 basis points since early August, in line with the rise in government bonds.

There is also no breakage of the pound. Sterling has had a rough couple of weeks, but the Bank of England’s trade-weighted index is still higher than after the referendum. The pound is roughly in line with its average exchange rate against the euro over the past six years. It has risen against the Japanese yen and the Korean won this year. The most notable story in the global currency markets is the rise and rise of the overpowering dollar.

The UK is going through tough times, but it’s not an economic crisis and it’s no worse off than Europe. It also does not have higher inflation, contrary to what we are led to believe. The August number was 9.9 percent in the UK and 10.1 percent in the EU.

What we are dealing with is a cultural crisis: a betrayal of clergy. The pathological catastrophe of the pro-Brussels commentary becomes a national cancer.

This article is excerpted from The Telegraph’s Economic Intelligence newsletter. Register here to get exclusive insight from two of the UK’s leading economic commentators – Ambrose Evans-Pritchard and Jeremy Warner – delivered straight to your inbox every Tuesday.

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