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So farewell, then, Trussonomics.

The demise of the country’s second shortest-lived chancellor also brings with it the demise of the country’s shortest-lived economic movement.

Liz Truss came into office promising to boost the country’s growth rate through a forensic combination of tax cuts, reforms to the country’s supply side (for which read: things like planning reform) and spending restraint. This was, if you squint a little bit, not dissimilar to the kinds of policies espoused by Ronald Reagan and Margaret Thatcher.

UK 30 year bond yield

Tory MPs turn on Truss as PM scrambles to save job after sacking chancellor – latest updates

It always looked risky – especially at such a fragile point for the global economy. We are coming to the end of a 12-year period of cheap money, something which is causing a near-nervous breakdown in financial markets. Central banks are in the process of raising interest rates and trying to feed the glut of bonds they bought during the financial crisis back in the market.

As if that weren’t enough, Europe is facing one of its bleakest economic winters in modern memory, with a war raging in Ukraine and energy prices touching historic highs. It is hard to think of many less auspicious periods to attempt an untested new economic manifesto.

Yet Ms Truss and her former chancellor Kwasi Kwarteng pushed on all the same. And unlike Thatcher, whose first few budgets were grisly austerity packages which no one much enjoyed, Ms Truss and Mr Kwarteng aimed to turn Thatcherism on its head. Instead of fixing the public finances first and then cutting taxes second, they opted to spend the fruits of economic growth before that growth had even been achieved.

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The mini-budget of 23 September was a small document with extraordinarily large consequences. Ironically, the more expensive the measures were, the less controversial they turned out to be. The scheme to cap household energy unit costs will potentially cost hundreds of billions of pounds, yet (and we know this because it was pre-announced long before the mini-budget) investors barely batted an eyelid. They carried on lending to this country at more or less the same or equivalent rates.

The same was not the case for the rest of the mini-budget’s policies. Shortly after they were announced – everything from the abolition of the 45p rate (actually quite cheap in fiscal terms) to the cancellation of Rishi Sunak’s corporation tax rise – markets began to lurch in what was, for Ms Truss, and most UK households, the wrong direction. The pound sank, the yields on government debt, which determine the interest rates across most of the economy, began to climb.

That was bad enough. When Mr Kwarteng announced gleefully a couple of days later on television that he had more tax cuts up his sleeve, the trot out of the country became a stampede. The pound fell, briefly, to the lowest level against the dollar in the history of, well, the dollar.

Pound vs dollar

Even more worryingly, those interest rates on government bonds rose at an unprecedented rate, causing all sorts of malfunctions throughout the money markets.

The most obvious – and the one that perhaps will have the longest legacy – is the rise in mortgage rates. But the unexpected consequences were even more worrying, among them a crisis in funds used by pension schemes. That sparked a “run dynamic” which compelled the Bank of England to step in with an emergency support scheme.

Even at this point, we were into unprecedented territory. Never before had the Bank been forced to intervene quite like this. Never before had it had to do so as a result of a government’s Budget.

The intervention, however, had some success, bringing down the relevant interest rates and bringing markets back from the edge. But there was a sting in the tail: a deadline. Today, 14 October.

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Analysis: PM’s new tax U-turn

In hindsight perhaps it’s obvious that this, then, would always have been the day when the government might face another existential crisis. Investors were always going to be nervous ahead of the Bank’s withdrawal from this neck of the bond market. And that is precisely what happened: after the governor reiterated, on a panel in Washington, that he was indeed serious, all eyes then turned to the chancellor. Could he say something to reassure markets?

In the event, the answer was: no. But something else changed matters: growing rumours of a U-turn. That brings us to this morning. The chancellor, pulled back from Washington early, was dismissed. The U-turn began. The corporation tax freeze is to be abandoned. The coming medium-term fiscal plan will involve austerity and a big dose of fiscal pain. The upshot is that Trussonomics, which was hinged clearly on tax cuts like these, is dead in the water.

However, the bigger question concerns what happens next. Those markets, which Ms Truss said explicitly were the reason for her U-turn, are still pretty frantic. No one knows how they’ll fare on Monday, but, whether right or wrong, another grisly day will almost certainly be seen as a sign of the government’s failure. And, having sealed the fate of her chancellor, the markets could well seal the fate of the prime minister.

But that’s a few days away – a long time in both politics and markets.

Liz Truss appoints Jeremy Hunt as chancellor. Pic: Andrew Parsons / No 10 Downing Street
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Liz Truss appoints Jeremy Hunt as chancellor. Pic: Andrew Parsons / No 10 Downing Street

In the meantime, here is something to dwell on: an alternative version of history. In a parallel universe, Ms Truss and Mr Kwarteng did things slightly less hastily. They decided their emergency Budget would simply deal with the energy price shock coming this winter. They promised an OBR statement and hatched plans for a growth-generating budget in a few months’ time.

In that parallel universe, interest rates probably wouldn’t have risen so high. The rises would, anyway, have been blamed on the Bank of England, not the government. The government would have enjoyed some kudos for having prevented energy-related penury this winter and made merry in their honeymoon. Things could have been oh-so different.

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Now, all of this is of course imponderable. But it does rather underline an important point: none of this was inevitable. This wasn’t a crisis like 1992 – where the UK faced monetary pressures suffered by nearly every other nation in Europe. It was simply a succession of very unfortunate decisions at precisely the wrong moment.

At a time of market turmoil and war in Europe, Ms Truss and Mr Kwarteng chose to take a gamble. It did not pay off.

To register your interest and share your story, please email TheGreatDebate@sky.uk

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It’s not ‘traditional’ wildfire season – so why have the California fires spread so quickly?

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It's not 'traditional' wildfire season - so why have the California fires spread so quickly?

A real-life drama is unfolding just outside Hollywood. Ferocious wildfires have ballooned at an “alarming speed”, in just a matter of hours. Why?

What caused the California wildfires?

There are currently three wildfires torching southern California. The causes of all three are still being investigated.

The majority (85%) of all forest fires across the United States are started by humans, either deliberately or accidentally, according to the US Forest Service.

But there is a difference between what ignites a wildfire and what allows it to spread.

However these fires were sparked, other factors have fuelled them, making them spread quickly and leaving people less time to prepare or flee.

The main culprit so far is the Santa Ana winds.

Follow live: Malibu residents told to get ready to flee

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LA residents face ‘long and scary night ahead’

What are Santa Ana winds?

So-called Santa Ana winds are extreme, dry winds that are common in LA in colder winter months.

The California Department of Forestry and Fire Protection warned strong Santa Ana winds and low humidity are whipping up “extreme wildfire risks”.

Winds have already topped 60mph and could reach 100mph in mountains and foothills – including in areas that have barely had any rain for months.

It has been too windy to launch firefighting aircraft, further hampering efforts to tackle the blazes.

These north-easterly winds blow from the interior of Southern California towards the coast, picking up speed as they squeeze through mountain ranges that border the urban area around the coast.

They blow in the opposite direction to the normal onshore flow that carries moist air from the Pacific Ocean into the area.

The lack of humidity in the air parches vegetation, making it more flammable once a fire is started.

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Wildfires spread as state of emergency declared

The ‘atmospheric blow-dryer’ effect

The winds create an “atmospheric blow-dryer” effect that will “dry things out even further”, said Daniel Swain, a climate scientist at University of California, Los Angeles (UCLA).

The longer the extreme wind persists, the drier the vegetation will become, he said.

“So some of the strongest winds will be at the beginning of the event, but some of the driest vegetation will actually come at the end, and so the reality is that there’s going to be a very long period of high fire risk.”

What role has climate change played?

California governor Gavin Newsom said fire season has become “year-round in the state of California” despite the state not “traditionally” seeing fires at this time of year – apparently alluding to the impact of climate change.

Scientists will need time to assess the role of climate change in these fires, which could range from drying out the land to actually decreasing wind speeds.

But broadly we know that climate change is increasing the hot, dry weather in the US that parches vegetation, thereby creating the fuel for wildfires – that’s according to scientists at World Weather Attribution.

But human activities, such as forest management and ignition sources, are also important factors that dictate how a fire spreads, WWA said.

Read more:
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A U.S flag flies as fire engulfs a structure while the Palisades Fire burns during a windstorm on the west side of Los Angeles, California.
Pic: Reuters
Image:
Pic: Reuters

Southern California has experienced a particularly hot summer, followed by almost no rain during what should be the wet season, said Professor Alex Hall, also from UCLA.

“And all of this comes on the heels of two very rainy years, which means there is plenty of fuel for potential wildfires.

“These intense winds have the potential to turn a small spark into a conflagration that eats up thousands of acres with alarming speed – a dynamic that is only intensifying with the warmer temperatures of a changing climate.”

The flames from a fire that broke out yesterday evening near a nature reserve in the inland foothills northeast of LA spread so quickly that staff at a care home had to push residents in wheelchairs and hospital beds down the street to a car park.

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LA wildfire site is one of most exclusive suburbs – but it’s in the grips of one of mother nature’s terrifying levellers

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LA wildfire site is one of most exclusive suburbs - but it's in the grips of one of mother nature's terrifying levellers

Pacific Palisades is one of Los Angeles’s most expensive and exclusive suburbs, home to film stars and billionaires.

The broad boulevards are framed by palm trees and gated mansions with swimming pools.

But it’s in the grips of one of mother nature’s terrifying levellers, a firestorm which is ripping through community after community, raging and unremitting.

Follow live: 30,000 told to flee

Firefighters battle the Palisades Fire as it burns multiple structures in the Pacific Palisades neighborhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Ethan Swope)
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Pic: AP

A firefighter jumps over a fence while fighting the Palisades Fire in the Pacific Palisades neighbourhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Ethan Swope)
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A firefighter jumps over a fence while fighting the Palisades Fire. Pic: AP

A billowing cloud of black smoke loomed over the main shopping street with its fancy restaurants and designer shops, threatening to destroy what many here consider to be their slice of paradise.

It is a reminder of the destructive power of this sort of weather.

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Martha Kelner reports from Pacific Palisades

Reza, a lifelong resident of Pacific Palisades, was evacuating with what belongings he could fit in his SUV.

“This is surreal, this is unbelievable,” he said.

Reza, a lifelong resident of Pacific Palisades, was evacuating with what belongings he could fit in his SUV.
Image:
Reza, a lifelong resident of Pacific Palisades, was evacuating with what belongings he could fit in his SUV.

“I’ve lived here all my life but this is like nothing I’ve ever seen before. This is the worst of the worst.

“I’ve never seen it with these winds, we just keep praying that the direction changes. But if the direction changes it’s to the detriment of somebody else, that’s the horrible part about it all.”

Firefighters hose down flames as the Palisades Fire destroys a residence in the Pacific Palisades neighborhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Etienne Laurent)
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Pic: AP

A residence burns as a firefighter battles the Palisades Fire in the Pacific Palisades neighborhood of Los Angeles Tuesday, Jan. 7, 2025. (AP Photo/Eugene Garcia)
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Pic: AP

A residence burns as the Palisades Fire advances in the Pacific Palisades neighborhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Ethan Swope)
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Pic: AP

January is not normally wildfire season, but these are not ordinary circumstances, the blazes being propelled by the strongest winds in southern California for more than a decade, fuelled by drought conditions.

Authorities are warning that the winds will grow stronger overnight, meaning that conditions will likely worsen before they get better.

Police and the fire department went door to door, urging people to evacuate or risk losing their lives.

On the main road out of town, there was gridlock traffic, with some abandoning their cars to flee on foot.

Firefighters battle the advancing Palisades Fire in the Pacific Palisades neighborhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Etienne Laurent)
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Pic: AP

On Mount Holyoake Avenue, Liz Lerner, an 84-year-old with congestive heart failure, was on her driveway and visibly panicked.

“I don’t drive, and I’m by myself,” she said.

“I have no relatives, I’m 100% alone and I don’t know what to do. My father built this house in 1949, this is my family home and this is the end. I’ve never seen anything like this.”

On Mount Holyoake Avenue, Liz Lerner, an 84 year old with congestive heart failure, was on her driveway and visibly panicked.
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Liz Lerner, an 84 year old with congestive heart failure, was on her driveway and visibly panicked

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Around the corner, another man was hosing down his multi-million dollar home in a bid to save his property from the fire bounding towards it from a nearby canyon.

“I can’t decide whether to evacuate or stay and carry on hosing down my house,” he said.

“It’s hard to know which way the flames are heading.”

A firefighter makes a stand in front of the advancing Palisades Fire in the Pacific Palisades neighborhood of Los Angeles, Tuesday, Jan. 7, 2025. (AP Photo/Etienne Laurent)
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Pic: AP

Other blazes were breaking out across LA with firefighting planes grounded because of winds which are growing stronger by the hour.

More homes, neighbourhoods and lives are under threat from this perfect and petrifying storm.

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Soldiers concerned at time SAS had ‘golden pass to get away with murder’ in Afghanistan, inquiry hears

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Soldiers concerned at time SAS had 'golden pass to get away with murder' in Afghanistan, inquiry hears

Soldiers working within the UK’s special forces discussed concerns that Afghans who posed no threat were being murdered in raids against suspected Taliban insurgents, an inquiry has been told.

One soldier, who was reading operational reports of SAS actions, said in an email in 2011 that they feared that UK special forces seemed “beyond reproach”, with “a golden pass allowing them to get away with murder”.

Another soldier said they were aware of rumours of special forces soldiers using “dropped weapons” – which were munitions allegedly placed next to targets to give the impression they were armed when they were shot.

It was also suggested that the act was known as a “Mr Wolf” – supposedly a reference to the fixer “Winston Wolfe” from the film Pulp Fiction.

The claims come from hundreds of pages of documents detailing evidence given to a public inquiry into alleged war crimes committed by British special forces soldiers in Afghanistan between 2010 and 2013.

The independent inquiry was ordered by the Ministry of Defence (MoD) after the BBC reported claims that SAS soldiers from one squadron had killed 54 people in suspicious circumstances during the war in Afghanistan more than a decade ago.

The inquiry is examining a number of night-time raids carried out by British forces from mid-2010 to mid-2013.

On Wednesday, it released evidence from seven UK special forces (UKSF) witnesses who gave their evidence in secret for national security reasons and cannot be named.

None of the soldiers who gave evidence to the inquiry, which opened in 2023, said they had witnessed any such behaviour themselves.

‘Fighting age males’

One of the soldiers, known only as N1799, told the inquiry they had raised concerns in 2011 about a unit referred to as UKSF1 after having a conversation about its operations with one of its members on a training course.

“During these operations it was said that ‘all fighting age males are killed’ on target regardless of the threat they posed, this included those not holding weapons,” their witness statement said.

“It was also indicated that ‘fighting age males’ were being executed on target, inside compounds, using a variety of methods after they had been restrained. In one case it was mentioned a pillow was put over the head of an individual before being killed with a pistol.”

The soldier said he was also informed that weapons were being “dropped” next to victims “to give the impression that a deceased individual had been armed when shot”, the inquiry heard.

Such a dropped weapon was colloquially known as a “Mr Wolf”, but N1799 stated he had “no idea at all” where the term came from.

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Counsel to the inquiry Oliver Glasgow KC asked: “When you heard it described as a ‘Mr Wolf’, was that used by one person or by more than one person or can you not remember?”

N1799 replied: “At least two or three people.”

Mr Glasgow continued: “Have you seen the film Pulp Fiction by Quentin Tarantino, where the individual who introduces himself as Mr Wolf says ‘I’m Mr Wolf and I’m here to solve problems’? Do you remember that?

The witness said: “No, I don’t.”

Mr Glasgow said: “Well, it is probably not essential viewing for anyone, but that particular individual in that film, he acts to clear up problems and to make crimes go away, does he not?”

N1799 responded: “Right. I had not put two and two together.”

The inquiry heard that N1799 escalated their concerns to other senior officers who took them seriously.

But, questioned by Mr Glasgow on whether they had any concerns for their own personal wellbeing after making allegations, the witness said: “I did then and I still do now.”

‘Mud-slinging’

Another officer, referred to as N2107, emailed colleagues expressing his disbelief at summaries of operations which suggested detained suspects had been allowed back into compounds where they were then said to have picked up weapons and attempted to attack the unit.

Meanwhile, a special forces commanding officer told the inquiry he believed reporting allegations of murder to his counterpart in another unit may have been seen as “mud-slinging”.

He said there was an “at times fractious and competitive” relationship between his unit and the accused unit.

In one of the hearings, he was asked whether he thought about reporting the allegations to his direct counterpart within the unit, but said it was a “deliberate act” to report up rather than sideway as it may be seen as “mud-slinging”.

British military police have previously conducted several inquiries into allegations of misconduct by forces in Afghanistan, including those made against the SAS.

However, the MoD has said none found enough evidence for prosecutions.

The inquiry’s aim is to ascertain whether there was credible information of extra-judicial killings, whether investigations
by the military police years later into N1799’s concerns were properly conducted, and if unlawful killings were covered up.

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