Your Saturday UK Briefing: Mr. Kwarteng Goes to Washington

Something for the weekend Author of the article: Bloomberg News Sara Marley Photographer: Luke MacGregor/Bloomberg Photo by Luke MacGregor /Bloomberg (Bloomberg) — Liz Truss isn’t having much of a honeymoon period as the country’s new prime minister.  The Conservatives’ annual party conference in Birmingham last week descended into infighting over her U-turn on taxes for the…
Your Saturday UK Briefing: Mr. Kwarteng Goes to Washington

Something for the weekend

Author of the article:

Bloomberg News

Sara Marley

Photographer: Luke MacGregor/Bloomberg Photo by Luke MacGregor /Bloomberg

(Bloomberg) — Liz Truss isn’t having much of a honeymoon period as the country’s new prime minister.  The Conservatives’ annual party conference in Birmingham last week descended into infighting over her U-turn on taxes for the highest earners and support for the government has plunged in the month since she’s come to power.  On Friday, Truss fired trade minister Conor Burns following a “complaint of serious misconduct,” reviving headlines about Tory sleaze, and a new poll shows the Labour Party maintaining a 30-point lead. Given that backdrop, Britain’s finance minister Kwasi Kwarteng might welcome a trip abroad, though he may be in for a frosty reception when he travels to Washington for the International Monetary Fund’s annual meeting. Relations with the global lender are as sour as they’ve been since the UK was forced to beg for a bailout in 1976. The IMF will want Kwarteng to justify launching a £43 billion stimulus plan that’s bound to add fuel to an economy at a time the Bank of England is trying to choke inflation currently near a 40-year high. One study says the government will have to cut 200,000 jobs to avoid a debt spiral and will need to find £5 billion in savings just to cover the increase in public-sector wages that are already programmed for this year. Truss did get one piece of good news this week. Blackstone said it would expand its European headquarters in London, taking up a 226,000-square-foot building in the Mayfair district. The private equity group has doubled headcount in the city in the past three years to more than 500.With temperatures dropping and energy prices soaring, Britons are turning down the heating and putting on their jumpers. Keeping the thermostat a few degrees cooler than usual could reduce residential gas consumption by as much as 23%, according to a BloombergNEF forecast. That would be enough to stave off forced rationing and carry households comfortably through the coldest of the last 30 winters. Bloomberg Opinion’s Javier Blas says power blackouts might be unavoidable in the UK this winter. 

Elsewhere in Europe, demand for firewood is jumping, even as much of the continent basked in late summer sunshine. “It’s back to the old days,” one retailer said. About 40 million people in Europe already use wood for heating and soaring demand is sending  the price of everything from wood pellets to logs soaring.  Hungary even went so far as to ban exports of pellets and Romania capped firewood prices for six months.In Germany,  the country’s association of chimney sweeps is dealing with a flood of requests to connect new and old stoves to burn wood products. The country is rushing  to end its dependence on Russian gas, but still hasn’t been able to come up with a viable plan B.  Unless Chancellor Olaf Scholz can guide the country through the coming months, his power could be broken well before the next scheduled election in 2025, Michael Nienaber writes.The London Metal Exchange is seeking taking a stand on Russia’s invasion of Ukraine, with a possible ban on new Russian supplies in what would be a seismic event for the metals industry.  Russia accounts for about 9% of global nickel production, 5% of aluminum and 4% of copper and any cutoff by the LME would create headaches for some of the biggest buyers of the metals like Glencore.And if the news cycle leaves you feeling like you need a drink, Londoners can take some consolation in the fact that the city has two watering holes in the Top 10 of the world’s best bars. Tayer & Elementary, which mixes casual drinks in its industrial front half and more ambitious cocktails in the back, maintained the No. 2 slot for a second year, with the Connaught Bar giving up its top ranking  and slipping to No. 8.That’s all for today. We’ll be back tomorrow with a look at the week ahead.

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