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The question is whether it’s really been a convenient cover for banks to increase their profit, rather than something that deeply affected market dynamics in any permanent way. From your link:
The BoE’s view appears to be that the chaos of Truss’s period in government allowed banks and building societies to rebuild profit margins on their mortgage deals and reduce competition, to the detriment of households.
Jon Cunliffe, BoE deputy governor for financial stability, said this month that cheap mortgages before the “mini” Budget stemmed from banks wanting to increase market share, leading to profit margins becoming “very compressed”. That was no longer true, he added.
The graph shows its effect quite well on bond yields, which seems pretty temporary to me.
Truss appears to be punished by the press mainly for seeking a heterodox monetary position, rather than the real problem of the mini-budget being Truss/Kwarteng’s aim to expand neoliberalism. That’s problematic when it’s fairly clear that we’re going to need to rely on some heterodox ideas to get out of our current economic funk.
The first response for any change will now be “won’t anyone think of the bond traders?”, rather than discussion about where we can have some reasonable democratic control of parts of the economy that aren't working.
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slippers
@Maybelline
This is a free link. Explains the enduring effect of Truss’ ‘moron premium’ pretty well.
Giving away billions in unfunded tax cuts pissed off the bond traders, raising the interest on government borrowing, which spooked the markets. It also had obscure but potentially catastrophic consequences for pension funds, which Truss/Kwarteng should’ve paid attention to. And yes, it led mortgage lenders to ramp up interest rates and withdraw products in the turmoil, leading to entirely foreseeable damage to the UK property market.
Tl;dr - She’s a moron and we all paid the premium.