Liz Truss should be “given the benefit of the doubt”, the head of investment banking giant JPMorgan Chase has said after the prime minister brought the UK to the brink of financial crisis during her first month in office.
Despite many regarding Ms Truss as having potentially got off to the worst start in No 10 in modern history, Jamie Dimon – the chief executive of the largest investment bank in the US – said that new governments “always have issues”.
“I would like to see the new prime minister, the new chancellor, be successful,” Mr Dimon told CNBC during the Techstars conference in London on Monday.
It will “take time to execute the policies and drive growth and what’s important”, and there are “a lot of things the UK has going for it and proper strategies to get it growing faster”, he said, adding: “Then it can accomplish some of the other objectives it wants to accomplish too.”
Ms Truss and her chancellor Kwasi Kwarteng were forced to U-turn on a pledge to abolish the top rate of income tax after the move spooked investors, prompting the Bank of England to make an emergency intervention to stabilise the gilt market in order to stop pension funds from collapsing.
In a further bid to reassure markets, Ms Truss watered down her attack on Treasury “orthodoxy”, appointing an insider to replace top civil servant Sir Tom Scholar – who Mr Kwarteng sacked as permanent secretary on his first day in office, reportedly in favour of someone who had never worked in the department.
The chancellor also bowed to calls to bring forward his new fiscal plan, but hours later the Institute for Fiscal Studies (IFS) warned that he must either reverse the remaining tax cuts in his mini-Budget or face imposing a “painful” £60bn austerity programme.
While Ms Truss has made “growth, growth, growth” the stated priority of her premiership, the IFS predicts that Britain is set for a recession until 2024.
The previous day, Mr Dimon had said: “I think every government should be focusing on growth — I would love to hear that out of their mouth every time a president or prime minister speaks.”
“Growth comes from proper tax policies, from proper investment policies, consistency of law … being attractive to foreign investment, being attractive to companies and having strategy around industries,” he said.
On Tuesday, the Bank of England announced it was boosting its emergency intervention for a second day running to prevent a “fire sale” in UK government bonds and market dysfunction it warned posed a “material risk to UK financial stability”.
