Three Kingdoms’ Credit Crunches Update: A Sterling Performance

“There’s also recognition there’s a point beyond which that control could break down if things got really bad.” (Andrew J. Bailey)

(Source: @abigailrosefoster, caption by Virgil)

Summary:

·       Andrew “The Governor” Bailey confirms that Sterling is being micromanaged, as a monetary policy tool, in the face of an exogenous Oil Shock.

·       The Bank of England is leveraging up the risk in its regained credible commitment.

Extracts

·       Having baled on Don Keir “Inner Temple’s” Jibbers, Andrew “The Governor” Bailey should, now, be tightening, against them, according to the September Key Signals monthly UK indicator.

·       Chancellor Reeves signals that the UK fiscal rules will be bent.

·       Presumably, Andrew “The Governor” Bailey will let Sterling do the tightening; until it crashes the UK economy, at which point, he will, then, let it do the easing.

·       The effective loss of control of Sterling will oblige the UK to seek help from the IMF.

·       The IMF will opine that the bent fiscal rules are broken.

(Source: the Author, September 28^th 2024)

(Source: Bloomberg, caption by the Author)

(Source: Bloomberg, caption by the Author)

(Source: bankofengland, caption by the Author)

(Source: Bloomberg, caption by the Author)