Trussonomics Mess Has Even France Fearing Contagion
This is a self-inflicted crisis at heart, but the scale of the turmoil also makes London look like a canary in the coal mine.
Watch out.
Source: Bloomberg
The French are worried about the UK. Not because of any competitive threat from an unshackled post-Brexit economy that’s tearing up European Union rules like a cap on banker bonuses. But because of the contagion risks of a budget plan so reckless it triggered a market selloff and a scramble by the Bank of England to intervene.
Just a few weeks after Prime Minister Liz Truss used France as an example of how not to attract investment, Bank of France boss Francois Villeroy de Galhau has returned the favor by warning lawmakers about the market volatility triggered by “Trussonomics.” That’s now a cautionary tale for governments that drop the ball on budget deficits and debt levels. Emmanuel Macron’s administration should keep tabs on public spending, bring down debt and not “add uncertainty to uncertainty,” he said.