Liz Truss’s ‘favourite’ economist says chancellor ‘took his eye off ball’ and ‘overstepped the mark’ with mini-budget

Published

3 years ago

September 29, 2022

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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.”

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.

“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

What’s it like with the National Guard on the streets of DC?

Published

2 hours ago

August 22, 2025

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What's it like with the National Guard on the streets of DC?

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What’s it like on the streets of DC right now, as thousands of federal police patrol the streets?

Who is Steve Witkoff, the US envoy regularly meeting Vladimir Putin and Benjamin Netanyahu to broker peace in Ukraine and Gaza?

And why is Californian Governor Gavin Newsom now tweeting like Donald Trump?

Martha Kelner and Mark Stone answer your questions.

If you’ve also got a question you’d like the Trump100 team to answer, you can email it to trump100@sky.uk.

You can also watch all episodes on our YouTube channel.

World

It’s been a confusing week – and Trump’s been made to look weak

Published

2 hours ago

August 22, 2025

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It’s been a confusing week.

The Monday gathering of European leaders and Ukraine’s president with Donald Trump at the White House was highly significant.

Ukraine latest: Trump changes tack

The leaders went home buoyed by the knowledge that they’d finally convinced the American president not to abandon Europe. He had committed to provide American “security guarantees” to Ukraine.

The details were sketchy, and sketched out only a little more through the week (we got some noise about American air cover), but regardless, the presidential commitment represented a clear shift from months of isolationist rhetoric on Ukraine – “it’s Europe’s problem” and all the rest of it.

Yet it was always the case that, beyond that clear achievement for the Europeans, Russia would have a problem with it.

Trump’s envoy’s language last weekend – claiming that Putin had agreed to Europe providing “Article 5-like” guarantees for Ukraine, essentially providing it with a NATO-like collective security blanket – was baffling.

Russia gives two fingers to the president

And throughout this week, Russia’s foreign minister Sergei Lavrov has repeatedly and predictably undermined the whole thing, pointing out that Russia would never accept any peace plan that involved any European or NATO troops in Ukraine.

“The presence of foreign troops in Ukraine is completely unacceptable for Russia,” he said yesterday, echoing similar statements stretching back years.

Remember that NATO’s “eastern encroachment” was the justification for Russia’s “special military operation” – the invasion of Ukraine – in the first place. All this makes Trump look rather weak.

It’s two fingers to the president, though interestingly, the Russian language has been carefully calibrated not to poke Trump but to mock European leaders instead. That’s telling.

The bilateral meeting (between Putin and Zelenskyy) hailed by Trump on Monday as agreed and close – “within two weeks” – looks decidedly doubtful.

Maybe that’s why he went along with Putin’s suggestion that there be a bilateral, not including Trump, first.

It’s easier for the American president to blame someone else if it’s not his meeting, and it doesn’t happen.

NATO defence chiefs met on Wednesday to discuss the details of how the security guarantees – the ones Russia won’t accept – will work.

European sources at the meeting have told me it was all a great success. And to the comments by Lavrov, a source said: “It’s not up to Lavrov to decide on security guarantees. Not up to the one doing the threatening to decide how to deter that threat!”

The argument goes that it’s not realistic for Russia to say from which countries Ukraine can and cannot host troops.

Would Trump threaten force?

The problem is that if Europe and the White House want Russia to sign up to some sort of peace deal, then it would require agreement from all sides on the security arrangements.

The other way to get Russia to heel would be with an overwhelming threat of force. Something from Trump, like: “Vladimir – look what I did to Iran…”. But, of course, Iran isn’t a nuclear power.

Something else bothers me about all this. The core concept of a “security guarantee” is an ironclad obligation to defend Ukraine into the future.

Future guarantees would require treaties, not just a loose promise. I don’t see Trump’s America truly signing up to anything that obliges them to do anything.

A layered security guarantee which builds over time is an option, but from a Kremlin perspective, would probably only end up being a repeat of history and allow them another “justification” to push back.

Image and reality don’t seem to match

Among Trump’s stream of social media posts this week was an image of him waving his finger at Putin in Alaska. It was one of the few non-effusive images from the summit.

He posted it next to an image of former president Richard Nixon confronting Soviet leader Nikita Khrushchev – an image that came to reflect American dominance over the Soviet Union.

That may be the image Trump wants to portray. But the events of the past week suggest image and reality just don’t match.

The past 24 hours in Ukraine have been among the most violent to date.

World

At least 17 dead in Colombia after car bombing and helicopter attack

Published

2 hours ago

August 22, 2025

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At least 17 dead in Colombia after car bombing and helicopter attack

At least 17 people were killed after a car bombing and an attack on a police helicopter in Colombia, officials have said.

Authorities in the southwest city of Cali said a vehicle loaded with explosives detonated near a military aviation school, killing five people and injuring more than 30.

Authorities said at least 12 died in the attack on a helicopter transporting personnel to an area in Antioquia in northern Colombia, where they were to destroy coca leaf crops – the raw material used in the production of cocaine.

Antioquia governor Andres Julian said a drone attacked the helicopter as it flew over coca leaf crops.

Colombian President Gustavo Petro attributed both incidents to dissidents of the defunct Revolutionary Armed Forces of Colombia (FARC).

He said the aircraft was targeted in retaliation for a cocaine seizure that allegedly belonged to the Gulf Clan.

Who are FARC, and are they still active?

The Revolutionary Armed Forces of Colombia, a Marxist guerrilla organisation, was the largest of the country’s rebel groups, and grew out of peasant self-defence forces.

It was formed in 1964 as the military wing of the Colombian Communist Party, carrying out a series of attacks against political and economic targets.

In 2016, after more than 50 years of civil war, FARC rebels and the Colombian government signed a peace deal.

It officially ceased to be an armed group the following year – but some small dissident groups rejected the agreement and refused to disarm.

According to a report by Colombia’s Truth Commission in 2022, fighting between government forces, FARC, and the militant group National Liberation Army had killed around 450,000 people between 1985 and 2018.

Both FARC dissidents and members of the Gulf Clan operate in Antioquia.

It comes as a report from the United Nations Office on Drugs and Crime found that coca leaf cultivation is on the rise in Colombia.

The area under cultivation reached a record 253,000 hectares in 2023, according to the UN’s latest available report.