Liz Truss has won the election for Conservative Party Leader and therefore will be our next Prime Minister. She won by the expected large majority although she would not have been my personal choice. Lacks charisma. Her acceptance speech was a lacklustre bunch of pedantic soundbites.
She has promised to cut taxes and tackle the energy crisis. But how is she going to control energy prices? It’s easy to impose price controls or subsidise consumption but who is going to pay for it and where is the money coming from are the key questions. She has promised quick answers to those questions but do we trust her to deliver?
Having a surname that is a homophone of trust should have helped her political career but now she faces real problems in the UK economy and social unrest over the cost of living. This will not be helped by the latest news that Russia has turned off the Nord Stream gas pipeline and has no intention of reopening it while sanctions persist. This will drive gas prices even higher.
It was a good morning to release negative news. Abrdn UK Smaller Companies Growth Trust (AUSC) which I hold announced that long-serving manager Harry Nimmo is to retire at the end of the year. This has long been expected and after 19 years of service is probably overdue. There comes a time when even the most respected managers need to be refreshed.
It’s bad news for staff of the FRC after the FT reported that a decision has been made to locate the new ARGA body which will take over their role in Birmingham. Well at least they might find cheaper housing and shorter commutes so they might view it as a positive move.
The new ARGA body is sorely required as the FT reports yet another “brazen $400mn accounting fraud” in a Chinese biotech company (China Medical Technologies). KPMG is being sued in a Hong Kong court for $830 million. The report says that four audit firm failed to ask “obvious” questions that would have “easily” exposed the fraud. These included not questioning a large related-party transaction by the group in 2006, when it acquired a Chinese diagnostics business worth $155,000 for $176mn, according to the liquidator.
These kinds of events are way too common all over the world including the UK. Implementing ARGA is taking way too long but I suspect that it will not be one of Truss’s priorities.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
You can “follow” this blog by entering your email address below. You will then receive an email alerting you to new posts as they are added.