Liz Truss’s ‘favourite’ economist says chancellor ‘took his eye off ball’ and ‘overstepped the mark’ with mini-budget
Prime Minister Liz Truss’s external adviser on the economy has told Sky News that the chancellor had “taken his eye off the ball” and “overstepped the mark” with his mini-budget.
Gerard Lyons, who is often referred to as Ms Truss’s ‘favourite’ economist, said Chancellor Kwasi Kwarteng failed to adequately prepare the financial markets ahead of his announcement.
Speaking on The Take With Sophy Ridge, Mr Lyons said: “The chancellor, whilst he had focused on the general public and on British businesses, he had not really prepared the financial markets fully.
“And I think he had taken his eye off the ball slightly, shall we say, in having not prepared the markets for what he was doing in the budget and I felt that he overstepped the mark last week.
“So it was a combination of all three factors – the febrile markets because of the global backdrop, the actions of the Bank of England last Thursday but let’s be in no doubt, it was primarily the mini-budget last Friday that triggered this latest series of events.”
Asked if he had had any conversations with Ms Truss or her team, Mr Lyons said he had “made my thoughts known”. He said he was “highlighting in my writing… about the febrile state of the markets and the need to keep the markets onside”.
Pushed on whether they had taken his advice, he said: “Well, sometimes people listen, sometimes they don’t, but there were positives that came out of it. But as we saw last Friday, there was just not enough in line with what the markets had been prepped for and were expecting.”
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Gerard Lyons: Mini budget not what the markets were expecting
Despite his remarks, Mr Lyons said the budget was “very positive in many respects”.
He said it was “very much on a pro-growth agenda” which was needed to “break out of this low-growth phrase”.
Mr Lyons’s remarks about the chancellor failing to prepare the financial markets were contrasted by a minister who told deputy political editor Sam Coates it was “bulls***t” to say market movement was related to the mini-budget announcement.
And on The Take with Sophy Ridge, chief secretary to the Treasury Chris Philp denied the government had any responsibility and said there would be no change of course.
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“Getting Britain’s economy growing is so important. Important to raise wages and important to pay the tax bills of the future,” he said.
Mr Philp suggested benefits may not be hiked in line with spiralling inflation. He said a commitment by former chancellor Rishi Sunak to uprate benefits in line with inflation was under consideration amid reports different government departments have been asked to draw up plans for efficiency savings.
Mr Philp told ITV’s Peston: “We are going to look for efficiencies wherever we can find them.”
But he said the Treasury would not commit to an expected uprating of benefits in line with inflation.
Pressed about the decision, he said: “I am not going to make policy commitments on live TV, it is going to be considered in the normal way, we will make a decision and it will be announced I am sure in the first instance to the House of Commons.”
On Wednesday the Bank of England was forced to launch an emergency government bond-buying programme to prevent borrowing costs from spiralling out of control and stave off a “material risk to UK financial stability”.
The Bank will buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets.
The announcement had an immediate effect on the market, with data showing 30-year bond yields fell back to 4.3%, having risen to levels above 5% not seen since 2002 earlier on Wednesday. There were similar falls for 20-year yields.
Ms Truss is expected to face public questioning about her economic plans for the first time on Thursday as she tours regional BBC radio stations in a morning round of interviews. Neither the prime minister nor the chancellor were anywhere to be seen on heard on the economy on Wednesday.
World
Sudan: Civilians trapped as UN warns of possible imminent attack on city of al Fashir by Rapid Support Forces
The United Nations has expressed increasing concern over a potential imminent attack on al Fashir, the capital of North Darfur in Sudan.
It comes as residents describe the city as “seriously suffocated” and besieged by Sudanese paramilitary forces known as the Rapid Support Forces (RSF).
A spokesperson for the office of UN secretary general Antonio Guterres said in a statement that “an attack on the city would have devastating consequences for the civilian population”.
“The escalation of tensions is an area already on the brink of famine,” with the rival Sudanese Armed Forces (SAF) appearing to be “positioning themselves”.
The last of Darfur’s five state capitals not under full RSF control, al Fashir city and its 800,000 inhabitants face an uncertain fate as a local ceasefire negotiated in the early days of the conflict has collapsed.
Mr Guterres has reiterated his call on all parties to refrain from fighting in the area.
At least 43 people, including women and children, have reportedly been killed since the RSF began their push into al Fashir earlier this month, Friday’s UN statement continued, and civilians are trapped in the city.
The North Darfur capital and sprawling displacement camps in its suburbs have been a haven for thousands of people displaced by armed conflict and ethnic violence in the region since the early 2000s, including the last year of war between the RSF and SAF.
Sudan was plunged into chaos in mid-April 2023 when tensions between its military, headed by General Abdel Fattah Burhan who leads the SAF, and the RSF paramilitary, commanded by Mohammed Hamdan Dagalo, broke out into street battles in the capital Khartoum.
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Sudan’s health system crippled by conflict
Fighting has spread to other parts of the country, especially urban areas and the western Darfur region.
The conflict has left around 25 million people, or half the country’s population, needing humanitarian aid, with over eight million forced to flee their homes, said the UN.
More than 14,000 people have been killed and tens of thousands of others wounded.
Residents have told Sky News the RSF is blocking main arterial routes bringing in goods and fuel to al Fashir, leaving them with dwindling medicine, humanitarian aid and food supplies as increased army airstrikes have hit civilian homes in surrounding areas.
Many fear a telecoms blackout which marked the start of an RSF-led massacre last year in al Geneina, the capital of West Darfur, and December’s siege of Wad Madani, the capital of al Jazira state, as reports mount of an RSF advance.
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The orphaned and disabled children forced to flee fighting in Sudan
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Sudan: A year of war at home
An online video shows a large RSF convoy in the desert, with militiamen yelling “lift your head al Fashir, the steel is coming”.
“Al Fashir is unsafe and an attack is expected at any time. Three days ago, a shell fell into my uncle’s house – only 80 metres from my home. My uncle was injured and my cousin’s son died,” said Mohamed.
“The city is seriously suffocated.”
Fighting displaced 40,615 people in al Fashir between 1 and 16 April, according to the International Organisation for Migration (IOM).
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‘Where will people go?’
Aid organisation Medecins Sans Frontieres (MSF), also known as Doctors Without Borders, has said it has responded to three mass casualty events in al Fashir’s South Hospital over the past week and treated over 100 wounded patients.
“The situation is already catastrophic and we are very worried that the escalation in conflict is going to make it even worse,” said MSF spokesperson Kirsty Cameron.
Alarm bells are sounding with little hope of successful intervention.
“Where will people go? People have fled to al Fashir from surrounding areas that are still unsafe. There are no more options for refuge,” said Darfuri journalist and human rights monitor Ahmed Gouja.
“They are forced to surrender to their death.”
Hamas has released a new video that appears to show two hostages who have been held in Gaza since the 7 October assault on southern Israel.
The two men, Keith Siegel, 64, and Omri Miran, 47, speak in the video against an empty background, sending their love to relatives and asking to be released.
The video was released during the Passover holiday, when Jews celebrate the biblical story of gaining freedom from slavery in Egypt.
Sky News has decided not to show the video online.
In the footage, Mr Siegel breaks down in tears as he recalls spending last year’s Passover with his family, saying he hoped they would be reunited.
Mr Miran was taken from his home in Nahal Oz in front of his wife and two daughters, while Siegel, who is a dual US citizen, was abducted with his wife, although she was released during the brief truce in November.
Keith Siegel
Omri Miran
Some 250 Israelis and foreigners were taken hostage during the 7 October Hamas attack, which killed around 1,200 people.
It prompted Israel’s assault on Gaza, as it pledged to destroy Hamas and bring the hostages home.
Some 34,000 Palestinians have been killed in the conflict so far, according to the Hamas-run Gaza health ministry.
Also on Saturday, Hamas said it was reviewing a new Israeli ceasefire proposal.
Hamas senior official Khalil al Hayya did not share details of Israel’s offer but said it was in response to a Hamas proposal made two weeks ago.
This included a six-week ceasefire, release of 40 civilian and sick hostages, in exchange for the release of Palestinian prisoners in Israeli jails.
Israel’s foreign minister said on Saturday that the country’s planned incursion into the southern Gaza city of Rafah could be put on hold if a deal is struck to secure the release of Israeli hostages.
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The hostage situation is putting pressure on Israeli leader Benjamin Netanyahu. Pic: Reuters
The prospect of an attack on Rafah has prompted concern from various countries, including Israel’s staunchest ally, the US.
Meanwhile, Egypt also ramped up its efforts to broker a deal that could end the war.
An Egyptian delegation left Israel on Saturday after talks there about a “new vision” for a ceasefire in Gaza.
This would include the release of some hostages and Palestinian prisoners and the return of many displaced Palestinians to their homes in northern Gaza with “minimum restrictions”, according to an Egyptian official.
Hamas still wants a permanent ceasefire and full withdrawal of Israeli troops but Israel has rejected both of these, saying it will continue military operations until Hamas is defeated and it will maintain a security presence in Gaza.
It came as protests continued around the world calling for an end to the conflict, including pro-Palestinian demonstrations in London and at universities across the US.
World
Om Fahad: Iraqi social media influencer shot dead by gunman on motorbike who posed as food delivery rider – report
A well-known Iraqi social media influencer has reportedly been shot dead in her car by a gunman on a motorbike.
Om Fahad, whose real name is Ghufran Sawadi, was killed outside her home in Baghdad’s Zayouna district on Friday, according to the AFP news agency, citing security officials.
It appears the unidentified attacker pretended to be delivering food to the victim, one security source said.
Om Fahad, who has nearly half a million TikTok followers, became famous for posting light-hearted videos where she dances to Iraqi music.
Six days ago, she shared footage of herself driving in a car and also posing in front of a mirror. They have each been watched hundreds of thousands of times.
The influencer was sentenced to six months in prison in February last year for sharing videos that a court ruled contained “indecent speech that undermines modesty and public morality”.
A campaign was launched in 2023 by the Iraqi government to clamp down on social media content which broke the country’s “morals and traditions”.
The interior ministry set up a committee to look for “offensive” clips on platforms such as TikTok and YouTube, with several influencers being arrested.
“This type of content is no less dangerous than organised crime,” the ministry declared in a promotional video which asked the public to help by reporting such content.
“It is one of the causes of the destruction of the Iraqi family and society.”
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Speaking last year, interior ministry spokesman Saad Maan argued the morality campaign has “nothing to do with freedom of expression”.
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In 2018, gunmen in Baghdad shot dead Tara Fares, who was a model and influencer.
After years of war and sectarian conflict following the 2003 US invasion that overthrew dictator Saddam Hussein, Iraq has returned to some semblance of normality despite sporadic violence, political instability and corruption.
But civil liberties, particularly among women and sexual minorities, are still constrained in a conservative and male-dominated society.
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