This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

  • fiscal policy, monetary policy, exchange rates

Click to listen to this podcast or read the transcript and then answer the questions:

Kwasi Kwarteng’s market meltdown

  • According to recent polls, how far are the Tories behind Labour?

  • Explain why the markets were so ‘spooked’ by the chancellor’s mini-Budget

  • On Monday 26 September2022, the pound fell to its lowest rate ever, £1:$1.035, compared with £1:$4.80 at the end of the war. Using a diagram, analyse the causes of the record low exchange rate

  • ‘It’s mostly fiscal!’ What was highly unusual about the IMF’s intervention?

  • Wednesday — the Bank of England’s intervention in the pension market. Explain the vicious circle that ensued around the selling of government bonds

  • Why does it look as though the Bank of England’s independence has been compromised?

Gavin Clarke, Emmanuel College

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