Sterling work

Regular readers will know that I am fond of waxing nostalgic about the early 90s, when I was young and carefree, so perhaps I should be grateful that the government has chosen to stir up memories of that era by arranging a rerun of the 1992 Sterling crisis.

As I recall, that particular debacle came to a head a week or so before I took a trip to the US, somewhat curtailing my spending power, so I’m glad that this time around I’ve had my summer holiday before the pound started flirting with dollar parity. That’s about the only bright spot though, as Kwasi Kwarteng’s horribly misjudged mini-budget threatens to deepen the coming recession into a full-blown depression.

The gloomiest forecasts are predicting that interest rates will have to go up to around 6% to arrest the fall in sterling, with the resulting increase in mortgage costs set to hit the middle-class bedrock of Tory support particularly hard, so political reality suggests that Liz Truss will perform a signature U-turn and adopt a marginally more sustainable fiscal policy. Failing that, we might have a new Prime Minister even sooner than expected.