Liz Truss’s £45bn tax cutting spree has set Britain on course for a bailout from the International Monetary Fund, a leading economist dubbed Dr Doom has warned, as fears grow that the pound could fall to parity with the dollar.
Nouriel Roubini, an economist who famously predicted the financial crisis, has warned that British investments are trading “like an emerging market” as he drew parallels with the economic chaos of the 1970s.
Mr Roubini said on Twitter that Britain is heading “back to the 1970s” and “eventually the need to go and beg for an IMF bailout” following huge tax cuts unveiled by Kwasi Kwarteng in his mini-Budget.
Why – even how – do you need to bail out a floating exchange rate?
Didn’t the Pound already fall to parity and make a slight uptick? It’s 1:1.08 (P/D) right now. I’d say that that’s parity
Britain is heading “back to the 1970s”
Too late matey, we’ve been back there for ages.
So that British consumers can continue to buy cheap plastic Chinese tat in unlimited quantities and continue to fund their own deindustrialization?
Dr Doom? Is Marc Faber still around? Has he cut off that pony tail yet? He promised to cut off an inch every time the market went up in opposition to his predictions.
Roubini predicted ‘a’ crash in 2008, but his claim was that people would stop using the US dollar. Problems arose in 2008 because instead of people NOT using US dollars there was more demand than supply of dollars! After the head of the Bundesbank began complaining about Target 2 numbers in July the European banks decided that they would rather hold any other currency than the euro!
I thought that sovereign currency issuers could never go bust? Or was that only on Tuesdays?