Liz Truss should try to calm the nerves of the markets with a clear stance on bank independence | Nils Pratley

TheThe first task of iz Truss is clear: to announce an energy price plan to pass the country through the winter. The second task, however, is almost as important: avoid scaring the financial markets. In this regard, currency analysts at Deutsche Bank were stating the obvious in a note on Monday when they greeted the new prime minister by saying that the risks of the UK balance of payments crisis “should not be underestimated” and that “policy announcements the next few weeks will be key in Determining the risks of extreme aggregate outcomes”.

A notable feature of the long leadership campaign is that theaesthetics“He has barely come out of talking about a ‘pro-growth’ mentality and ‘supply-side reforms.’ Both ambitions can be seen as virtuous goals, but it is the accompanying promise of unfunded tax cuts that worries markets. The pressing problems today are widening current account deficits, higher Inflation rate in the Group of Ten rich countries, and a large part of national debt payments linked to interest rates Loose fiscal policy is not the classic recipe for those problems.

The great hope of the Truss camp seems to be that the markets will smile sweetly and embrace a view that imagines the larger deficit is part of a step toward a permanently higher growth path for the UK economy. This, at least, is gambling. But the plan is more likely to be received with an open mind if investors also know that Bank of England You will remain the guardian of monetary policy.

Campaign hints and trends that Threadneedle Street could be reviewed should look worrisome on the outside. None of them have heard from any new Prime Minister since independence was granted in 1997. Over the past 25 years, the UK’s credibility in financial markets has been closely linked to the idea that the Bank goes beyond political interference.

In the FT’s warm-up routine on Monday, Kwasi Kwarting, a potential incoming adviser, said the Truss administration was “fully committed” to independence, but added that “coordination across monetary and fiscal policy is important.” Was the second half of that phrase an attempt to calm nerves, or did it indicate a new approach? Clarity is essential – and fast. Markets tend not to tolerate uncertainty for long.

Aston Martin’s winning days are still a long way off

“We don’t need any more money at all. Let me be absolutely clear, in black and white: We don’t need money,” he said. Lawrence’s outingAston Martin CEO, as recently as Feb.

Messages, to put it mildly, have passed. In July, the Saudi Public Investment Fund was appointed as the lead investor, He poured 78 million pounds into the tank. Now comes the main event, which is flagged at the same time: Full octane rights issue to raise £576m, or more than the market value of the entire car company’s shares. For a company that was supposed to have a clear financial path in February, this is a major event.

In fact, it is the third stock fundraising after the original Stroll rescue of Aston Martin In early 2020. The Canadian billionaire was not so lucky to swoop in before Covid troubled everything, but he is now halfway toward a five-year transformation program and the challenge of turning Aston Martin into Britain’s “most luxurious performance brand” looks formidable.

Up to half of the combined fundraising proceeds of £654m will go towards repaying £1.23bn of debt at the last balance sheet date. That would remove £30m from cash interest payments this year, but only from a previous forecast of £195m. So, the real test awaits us: Aston Martin’s ability to refinance borrowings taken at unexpected rates before 2020. Success or failure will not be properly demonstrated until 2023 or 2024.

Stroll could point to progress under the hood: the group seems to have weaned itself off its addiction to making lots of cars. One can also admire his ability to amass prominent backers (not only Saudis but also Mercedes-Benz) and his willingness to continue investing his fortune in Aston Martin; His yew tree union takes full rights.

But the magical day when (currently losing) Aston Martin emerged with revenues of £2 billion and £500 million in operating profit is still a long way off. The rights issue has been going on from 2024 to 2525, at which time the switch to electric cars will be on track. At Aston Martin, goals are usually reviewed.

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