Politics

Kwasi Kwarteng was warned economy ‘worsened significantly’ but went ahead with mini-budget

Published

2 years ago

July 27, 2023

admin

Warnings about the state of the UK’s economy held back by Kwasi Kwarteng when he was chancellor have been published.

They show the country’s financial situation had “worsened significantly” even before Liz Truss took over.

Under the Truss premiership, Mr Kwarteng refused to release advice passed to him by the Office for Budget Responsibility (OBR) before the government announced the support scheme for energy bills and, later, the mini-budget.

Politics latest: Labour hits out at rising cost of summer holidays

The economic fallout from the spending and the lack of an official forecast spooked markets, pushing up government borrowing costs and putting certain pension funds on the brink of collapse.

Mr Kwarteng was sacked after trying to unpick his own financial plan, and was shortly followed out of the gates of Downing Street by Ms Truss.

Now, the OBR has released documents it prepared for Mr Kwarteng on his first day in office, following an order from the Information Commissioners’ Office.

While they are not fully comprehensive forecasts, they highlight the struggling state of the UK economy in September 2022 following COVID, the invasion of Ukraine and rising energy costs.

The OBR explained the UK was on the precipice of a year-long recession, and government borrowing was set to rise by £21.8bn more each year until 2026/27, when compared to data prepared in the spring.

The report stated the “economic outlook has worsened significantly” since their last full forecast in March.

It estimated borrowing for the 2022/23 period was already set to be £144.1bn – “significantly higher”, again, than the March prediction. This is a rise of 6.1% of GDP, and compares to the March prediction of £127.8bn.

Much of this was due to interest payments on debt the government held going up.

This rise wiped out much of the “headroom” – the extra money the government has to spend – from £27.8bn to £8.8bn.

Three days after Mr Kwarteng was sent the information by the OBR, Ms Truss announced the Energy Price Guarantee to help people with fuel bills, which was expected to cost tens of billions of pounds.

After the mourning period for Elizabeth II finished Mr Kwarteng revealed the administration’s totemic mini-budget, which increased borrowing even further to fund tax cuts which it was hoped would increase growth.

Markets reacted negatively to the plans – some blaming the lack of an official OBR forecast to go alongside Mr Kwarteng’s announcements.

This led to the collapse of the Truss administration and Rishi Sunak becoming prime minister.

A Treasury spokesperson said: “The document published reflects the OBR’s preparatory work sent to the then chancellor on his first day in office. The draft forecast did not include any policies ultimately announced in the Growth Plan.”

James Murray, Labour’s shadow secretary to the Treasury, said: “The fuse for the Tory mortgage bombshell was lit last autumn with their wild, unfunded tax cuts. Alongside that, the Conservatives’ irresponsible disrespect for independent institutions crashed the pound and sent interest rates soaring.

Click to subscribe to the Sky News Daily wherever you get your podcasts

“The reckless incompetence from the disastrous mini-Budget has left working people paying the price for Tory failure – with mortgage bills set to rise by £220 a month on average for those re-mortgaging.

“Labour’s economic plans will always be fully costed, fully funded, and built on the rock of fiscal responsibility. We recognise the important role played by the Office for Budget Responsibility and we will never disregard our independent economic institutions.”

Politics

Taiwan lawmaker calls for Bitcoin reserve at national conference

Published

4 hours ago

May 9, 2025

admin

Taiwan lawmaker calls for Bitcoin reserve at national conference

Taiwanese lawmaker Ko Ju-Chun has called on the government to consider adding Bitcoin to its national reserves, suggesting it could serve as a hedge against global economic uncertainty.

Ko, a legislator at-large in Taiwan’s legislative body, the Legislative Yuan, took to X on Friday to report that he had advocated Bitcoin (BTC) investment by the Taiwanese government at the National Conference on May 9.

In his remarks, Ko cited Bitcoin’s potential to become a hedge amid global economic risks and urged Taiwan to recognize the cryptocurrency alongside gold and foreign exchange reserves to boost its financial resilience.

Ko’s announcement came shortly after the legislator held talks with Samson Mow, who advocates for Bitcoin adoption by states like El Salvador at his BTC tech firm Jan3.

Taiwan is an export-oriented economy

Ko highlighted that Taiwan is an export-driven economy that has experienced significant fluctuations in its national currency, the New Taiwan dollar, amid global inflation and intensifying geopolitical risks.

“We currently have a gold reserve of 423 metric tons, and our foreign exchange reserves amount to $577 billion, including investments in US Treasury bonds,” the lawmaker stated.

In a scenario of more intense currency volatility or potential regional conflicts, Taiwan may “very likely be unable to ensure the security and liquidity,” Ko continued, adding that Bitcoin could be a great addition to Taiwan’s reserves for several reasons.

Law, Investments, Taiwan, Samson Mow, Policy, Bitcoin Reserve — *Ko Ju-Chun advocated for the adoption of Bitcoin by the Taiwanese government before the Legislative Yuan. Source: Ko Ju-Chun*

“Bitcoin has been operating for over 15 years. It has a fixed total supply, is decentralized, and is resistant to censorship. Many countries are focusing on its hedging attributes. At the same time, in intense situations, it may not face the risk of embargo,” he said.

Bitcoin is not the only solution

Referring to many global initiatives considering Bitcoin adoption as a reserve asset, Ko stressed that he’s not advocating for Bitcoin as the “only solution” to rising economic challenges.

Instead, the legislator suggested adding a “small proportion of Bitcoin” into the diversified assets as tools for sovereign asset allocation and risk hedging, and backup capacity of Taiwan’s financial system.

He previously suggested that Taiwan could allocate a maximum of 5% of its $50 billion reserve to Bitcoin in an X post on May 6.

“When exchange rate risk and regional uncertainty increase, it is time to introduce new tools to construct a more flexible financial strategy framework,” Ko said, adding:

“As former Dean Chen Chong said, Bitcoin is the gun of the digital era. It may also be the gold of the digital era, the silver of the digital era. Or it could be gunpowder. A wise nation will not let weapons be in others’ hands.”

The news comes as Taiwan is emerging as a crypto-friendly jurisdiction, with the Financial Supervisory Commission pushing institutional trials of crypto custody services in late 2024.

Mainland China continues to maintain its hostile stance on cryptocurrency after imposing a ban on multiple crypto activities, including mining, in 2021.

Magazine: Adam Back says Bitcoin price cycle ’10x bigger’ but will still decisively break above $100K

Politics

Germany seizes $38M in crypto from Bybit hack-linked eXch exchange

Published

7 hours ago

May 9, 2025

admin

Germany seizes M in crypto from Bybit hack-linked eXch exchange

German law enforcement seized 34 million euros ($38 million) in cryptocurrency from eXch, a cryptocurrency platform allegedly used to launder funds stolen after Bybit’s record-breaking $1.4 billion hack.

The seizure, announced on May 9 by Germany’s Federal Criminal Police Office (BKA) and Frankfurt’s main prosecutor’s office, involved multiple crypto assets, including Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Dash (DASH). The move marks the third-largest crypto confiscation in the BKA’s history.

The authorities also seized eXch’s German server infrastructure with over eight terabytes of data and shut down the platform, the announcement added.

eXch exchanged crypto without AML

In the statement, the BKA described eXch as a “swapping” service that allowed users to exchange various crypto assets without implementing Anti-Money Laundering (AML) measures.

The platform had operated since 2014 and reportedly facilitated about $1.9 billion in crypto transfers, some of which were believed to be of “criminal origin,” including assets laundered during the Bybit hack.

Germany seizes $38M in crypto from Bybit hack-linked eXch exchange — *Example of flow of Bybit exploit funds moving through eXch and bridging back and forth between Ether and Bitcoin. Source: TRM Labs*

“Among other things, a portion of the $1.5 billion stolen from the Bybit crypto exchange, which was hacked on Feb. 21, 2025, is said to have been exchanged via eXch,” the authorities wrote.

Multisig, FixedFloat among laundering cases

According to a post by crypto sleuth ZachXBT, eXch was also involved in laundering millions of funds from other crypto thefts and exploits, including Multisig, FixedFloat and the $243 million Genesis creditor theft.

Those were in addition to “countless phishing drainer services over the past few years with refusal to block addresses and freeze orders,” ZachXBT said.

Germany, AML, Crimes, Hacks, Policy, Bybit — *Source: ZachXBT*

ZachXBT was among the first security analysts to report on eXch’s links to laundering $35 million of crypto assets stolen from Bybit soon after the hack was confirmed.

“Lazarus Group transferred 5K ETH from the Bybit Hack to a new address and began laundering funds via eXch (a centralized mixer) and bridging funds to Bitcoin via Chainflip,” ZachXBT wrote in a Telegram post on Feb. 22.

eXch announced termination of services by May 1

After initially denying involvement in laundering funds from the Bybit hack, eXch eventually announced it would cease operations by May 1 in a Bitcoin Talk post published in mid-April.

“Even though we have been able to operate despite some failed attempts to shut down our infrastructure […], we don’t see any point in operating in a hostile environment where we are the target of SIGINT [Signals Intelligence] simply because some people misinterpret our goals,” it wrote.

Addressing the seizure, senior public prosecutor Benjamin Krause stressed the importance of action against “quick and anonymous opportunities for money laundering for any amount.”

“Crypto swapping is an essential component of the underground economy, used to conceal incriminated funds from illegal activities such as hacking or trading in stolen payment card data, thus making them available to perpetrators,” he said.

Magazine: Finally blast into space with Justin Sun, Vietnam’s new national blockchain: Asia Express

Politics

Can a trade deal with Trump save Starmer?

Published

9 hours ago

May 9, 2025

admin

Can a trade deal with Trump save Starmer?

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

With Ruth away, Beth and Harriet are joined by Salma Shah, a former Conservative special adviser from 2014-2018 and now a political commentator.

They unpack Donald Trump’s surprise UK trade deal announcement and what it means for Sir Keir Starmer, who’s also landed a deal with India and is gearing up for key EU negotiations.

But while the global optics look strong, the domestic mood is tense. Harriet has some advice for the Labour backbenchers who are unhappy over welfare cuts and the winter fuel allowance policy.

Also – does Sir Keir need a hand with his comms?

Come and join us live on Tuesday 20 May at Cadogan Hall in London, tickets available now: https://www.aegpresents.co.uk/event/electoral-dysfunction-live/

Remember you can also watch us on YouTube!