Observer.com news, pound ushered in the darkest moment. In more than 200 years of trading history, the pound sterling exchange rate against the US dollar has never reached 1:1. However, after EU and the US dollar fell to 1:1, the pound also reached the 1:1 mark against the US dollar. Currently, 1 pound can only be exchanged for around 1.06 US dollars, which is only a slight difference from falling below parity. The reason why
is that on the one hand, the United States has radically raised interest rates and forced the value of the US dollar. The yen, South Korean won and euro have depreciated significantly, and Britain, as the main ally of the United States, will naturally be harvested. On the other hand, British Prime Minister Tras announced a large-scale tax cut plan to try to boost the UK's economy. As a result, the pound collapsed as soon as the plan was introduced.
Tras is working on this tax cut plan, imitating his idol Mrs. Thatcher . But imitation is imitation after all. The situation in Britain today is different from that of Britain back then. Trass' ability is also far from that of Mrs. Thatcher. Simply imitating the economic policies at that time not only cannot save Britain, but it has cheated Britain.
The United States has done this too. Before the measures were introduced, everyone thought it was a perfect solution, but after the implementation, a series of problems arose. The US government's revenue has dropped significantly, and then it can only issue bonds on a large scale. Part of these debts flowed to the international community, but more of them were digested within the United States. In the end, the US's decision-making power gradually flowed into the hands of capitalists.
The situation facing the UK is even more serious. The UK does not have a tool like the US dollar, so it is difficult to pass the risks and can only bear the consequences on its own. The most direct consequence is to push up inflation.
At present, the inflation rate in the UK is hovering around 10%, which has put huge pressure on the British people. After a large-scale tax increase, inflation will further soar. This can be said to be a way to fight against poison with poison. Whether the ultimate success depends on whether the rising economy can offset the inflation caused by it. Experts generally believe that the gain will not be worth the loss, but will instead cause greater burden on the people. The radical tax increase policy of
is originally a contradiction. When the economy is normal, this method is not necessary because it is not scientific and how the situation will develop cannot be predicted. In an extraordinary period, the economic situation in the UK will be even more difficult to withstand the stimulus of the aggressive policy. In essence, it is betting that this policy can have a good ending, but it is highly likely that it will lose.
British media generally use "out of control" to describe Trass' large-scale tax hike policy, which also shows that after the policy is implemented, everything is uncontrollable. The sharp drop in the pound is just the beginning. Tras must not know what will happen next.
introduces a policy that you cannot control, just like driving a car and throwing the steering wheel away. The driver just stepped on the accelerator. Wherever the car can run, it can only be left to fate.
If the economic situation in the UK is healthy, it is equivalent to having a good car. If you drive automatically, relying on inertia, there may not be serious consequences in the short term.
However, the current economic situation in the UK is obviously unhealthy and is on the downward trend, which means that a broken car is driving on the downhill road. What the UK needs now is to prevent the continued decline and drive the car back on track. This is a test of the driver's skills. If you are an old driver, even if you can't drive back, you can slow down the decline.
However, the little driver of Tras not only threw away the steering wheel, but also gave the accelerator, and was very fierce, directly stepping the accelerator to the bottom, betting that this broken British car could drive back to the right road by itself. This way of betting on national destiny is definitely unreliable, and with the current situation in the UK, it cannot be handled at all.
Therefore, Tras's kick on the accelerator was not to save the UK, but to send the UK away directly.
