Bring back Liz Truss!

If that is the answer, what the heck was the question?

If you remember, Liz Truss was Prime Minister of the UK for some 34 days last Autumn, and despite half her time in office there was no actual politics, due to the Queen dying and being buried, she and her Chancellor did manage to neary destroy the economy, needing a £74bn injection from the Bank of England to stop most of the UK pension funds from collapsing.

The policies her Government executed, were the ultimate form of those pushed by the Institute of Economic Affairs, and others in the offices at 55 Tufton Street, self-proclaimed free marketeers, to who the actual free market look at and baulked.

That seventy four billion quid has to be paid for, and that is with interest rate rises, which fuels higher housing and borrowing costs. Not only that, Government debt funding, "Guilts", have seen the interest rate for the 2 year version now exceed that at the time of Trussenomics.

The Bank of England, now being briefed against by the Cabinet Office and members of the Government, has just one weapon in its armoury to tackle inflation: interest rates.

If monetary and iscal policy are not done together, then one has to play aganst the other:

"Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a nation's economic activity. Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by central banks, such as the U.S. Federal Reserve (Fed). Fiscal policy is a collective term for the taxing and spending actions of governments. In the United States, the national fiscal policy is determined by the executive and legislative branches of the government. "

It s Government fiscal policy that is in trouble, high levels of economic inactivity caused by the combined effects of COVID and Brexit, and a blunt refusal to even contemplate how changing our national relationship with the EU could make the economy do better.

The Chairman of the Bank of England blames galloping wages for the pressure on inflation and the need for higher interest rates, but for most of the workforce, pay has barely kept track of inflation, and in the last year with interest rates and energy costs rising, wages have falled far behind. So, stifling demand by increasing interest rates will only affect those with a mortgage that isn't locked into a fixed rate/term deal. The latest 0.5% interest rate rise will add about £600 a month to the average household bill, but in relaity that will affect only some 20%. But for those it does, will be ruinous.

Galloping inflation, rising interest rates, rising mortgages, huge economic inactivity and increasing barriers to trade with the EU make for a toxic economy, and the reality of a recession in the next near likely.

Meanwhile, with Sunak's popularity sinking fast, Conservative voices have been whispering that maybe Truss should return.

Yes, that's just what the country needs.