A lot can happen in a week, and for the UK economy, things have certainly been eventful! From a currency flash crash, to interest rate hikes, to an unprecendented intervention in the bond market. Rather than being the usual humdrum financial bulletin for city types, the business news has suddenly taken on the air of a soap opera. Think the ‘Big Short’ rather than Bloomberg news…
And what has brought this crisis on? A ‘mini budget’ from the new UK Chancellor, Kwasi Kwarteng.
From an astrological point of view, I always thought it potentially ominous that the Treasury chose Friday the 23rd of September – the day of the Equinox – to make his bombshell announcement. Why? Well, for one thing Venus was about to make an opposition to Neptune, which seems to have a propensity to cause FUD and confusion in markets, as it did last autumn, with the Evergrande default.
For another, it came within days of the Libra New Moon – significant because Sterling is moon-ruled. But also because of a challenging opposition by Jupiter to the luminaries.
I thought it worth looking at all the ‘major’ planetary players in this moon phase a bit more closely because they seem to offer us some insights into the various forces at work within the situation, as well as giving us some hints of what could happen next.
Jupiter in Aries: Reckless bet on growth?
Let’s start with Jupiter.
Kwarteng’s mini-budget and the pound crash that followed, prompted Lord O’ Donnell, an economist and board member of the IMF and Institute for Fiscal Studies, to remark:
The word ‘large’ immediately conjured up an image Jupiter, which happened to make an opposition to luminaries at the Libra New Moon, which took place just 2 days after the mini budget. In and of itself, this can point to a tension between wanting to go all out to promote growth (the thinking apparently behind all the tax cuts and ‘fiscal stimulus’) and efforts to foster equality and social justice (Sun & Moon in Libra).
How curious, then, to hear that one of the IMF’s main criticisms of the ‘mini-budget’ was it’s potential to ‘increase inequality,’ especially against a backdrop of rising interest rates and inflation, both of which are squeezing household budgets; and instead urging UK financial authorities to consider providing more ‘targeted support to families and businesses,’ rather than ‘sizable tax cuts and sharply higher government spending’.
Jupiter is currently in Aries, a sign known for being risk-prone, sometimes even reckless. You could liken it to high-stakes gambling. This combination can also be headstrong and over-confident, sometimes verging on arrogance – a position it has occupied since 10 May and which it will continue to occupy until 27 October, just after the solar eclipse in Scorpio.
I therefore find it interesting that Paul Johnson, from the Institute for Fiscal Studies, described the budget thus:
The bet is that these tax cuts and other policies will shock the economy on to a higher growth path. I sincerely hope that bet pays off. If it is to do so, we will need a lot more than tax cuts, changes to financial regulation and promises of planning reform. They should help, but they will not create a fundamentally stronger economy. A growth strategy needs to encompass education, skills, competition, tax reform — not just cuts — infrastructure, R&D and much more. Cutting tax rates is easy. Much of the rest is not.Institute for Fiscal Studies
What’s even more fascinating is that Liz Truss, the new Prime Minister, has the Jupiter in Aries natally.
Perhaps, rather ominously, her natal Jupiter is opposite Uranus, a planet known for being volatile, irreverant and sometimes erratic, especially if negatively aspected (as it is, in this case). It also forms part of a T-square to Saturn and Mercury – something I discussed in my recent astrology profile of her during the Tory leadership race. Nicknamed the ‘human hand grenade’ by Dominic Cummings, I am beginning to think that this Jupiter-Uranus signature may be to blame: Truss does seem to be an idealistic ‘disruptor’. But this needs to offset with practicality – something we have yet to see, but could be present in the form of her natal earth placements. However, her Venus in Virgo, though details-oriented, could be hampered via it’s t-square to Neptune and the Moon.
They say timing is everything, and given how often financial crashes and major recessions have begun in the autumn – something I’ve been saying in my forecasts, especially in relation to the Gann cycle and Elliott Wave theory, for some time – and that many experts have been predicting a winter of discontent for ordinary people, I did find it odd that the Treasury thought now was a good time to ‘go large’ and throw caution to the wind as far as the public purse was concerned.
Indeed, many people have found it quite astounding (and even downright perplexing) that Kwarteng and Truss would think it a good idea to introduce tax cuts for the rich and increase government debt levels at a time when ordinary folk are being squeezed to their limits financially due to the cost of living crisis and when the economy is being hit by a recession and interest rate hikes in a bid to curb rampant inflation – it just seems like political suicide and a recipe for civil unrest, rather than ‘Big Bang 2.0‘, as the Chancellor has been describing the measures.
Perhaps this is why the US government criticised her ‘trickledown’ economics as wishful thinking and evidence of a lack of fiscal discipline; and why economist David Blanchflower, accused her and Kwarteng of ‘raging incompetence’:
So the question is, if you if you’re the chancellor of the exchequer and what you’ve done is you’ve stood up and you crashed the markets – you’ve crashed the bond market, you’ve crashed the foreign exchange market, the stock market dropped, the housing market’s in trouble – and you created a giant recession as the Bank of England has to raise rates … your credibility is completely trashed.Huffington Post, Economist Blasts The ‘Raging Incompetence’ Of Truss And Kwarteng
Fomer BoE governor, Mark Carne was perhaps more charitable, citing a ‘lack of detail’ for the vote of no confidence in her mini budget delivered by financial markets, particularly the bond market, which had to be bailed out by the Bank of England on 28 September. Again, we see this in Truss’ astrology chart, particularly in terms of mutable T-square to Neptune in her natal 6th house of work from Venus in her 3rd house of communication, and the Moon in her 9th house of policy – a combination that can lead to vagueness, confusion and sometimes even poor judgement.
Saturn-Uranus: Clash of Old vs New
Also at work behind the current market volatility was Saturn and Uranus, which have slowly been edging back towards their square to each other since turning retrograde over the summer – a transit associated with clashes between old and new financial paradigms, as well as fear and financial uncertainty.
Perhaps noteworthy is that it’s return coincides with calls for reform to BoE fiscal policy, and a need to move away from economic ‘groupthink’ by both Mervyn King, the former BoE governor, and David Blanchflower – a former member of the bank’s Monetary Policy Committee.
“There is a role for a monetary policy committee, but it must be accountable, and it must be representative,” Blanchflower said. “Our proposal diversifies the professional and regional experience of those on the committee in a way that is bound to ensure that the interests of ordinary people are better reflected in the Bank of England’s decision-making processes. We need to encourage diversity of views to stop the groupthink that has dominated the MPC since its inception.”The Guardian, Economists call for radical shakeup of Bank’s interest rate committee
In an interview with Sky news’ Ed Conway, Lord King went further, citing faulty thinking and a failure of the economics profession as the real reason for soaring inflation and the current economic crisis the world is facing. He points out that energy and other commodity prices were already beginning to spike well before the Russia-Ukraine conflict, which only served to exacerbate a situation already affected by pandemic-related QE and supply chain disruption.
Aside from their role in heightening tensions in the October 2022 Libra New Moon chart, this tension between Saturn and Uranus, is also reflected in recent events at the Bank of England. According to the BBC’s economics editor, Faisal Islam, the decision to take action to stabilise the bond market came NOT from the MPC, but from another faction within the BoE:
The effective interest rates being charged to the UK government in these markets, which was spiralling to 20-year highs, has now fallen back. But it was not a decision made by the Bank’s Monetary Policy Committee, who were informed of the decision after it was made by the Bank’s financial experts. It comes at exactly the same time as that committee had been committed to do the exact reverse policy – selling government debt. That process was due to start next week and has now been delayed.Faisal Islam, BBC News
Clearly, there seem to be some tensions within the BoE itself.
In a recent article in the New Statesman, Blanchflower went further, arguing that outdated monetary policy is partly responsible for driving the UK into recession, and the recently unveiled mini budget by new chancellor, Kwasi Kwarteng, is simply putting the nail in the coffin.
Some, like Mark Carne, have also pointed to growing tension between the BoE and No.10, who appear to be working at cross-purposes to each other – behaviour exemplified in the cardinal T-square between Saturn, the nodes and Uranus.
As I explain in a recent video, the nodes can sometimes represent herd mentality or groupthink – and with Uranus hovering close to the North Node, it would seem that the time has come for some major shake-ups and paradigm shifts, particularly with regards to Taurus-ruled phenomena like agriculture, food production, land/property ownership and of course, money and banking.
Pluto: Radical Reform needed?
So, is there any good news in this darkening scenario?
Well, Pluto’s positive aspects to the Libra New Moon, as well as Venus and Mercury, could provide a silver lining in the form of decisions and/or fated events or circumstances that encourage us to make some much-needed lifestyle changes or systemic reforms that will help to offset any damage caused by Jupiter’s selfish or reckless ‘growth at all costs’ strategy.
Jupiter’s return to Pisces
This regressive behaviour is being exacerbated by the fact that Jupiter is currently retograde and will remain so until November the 22nd/23rd, depending on your timezone. However, this too shall pass – Jupiter is due to re-enter Pisces at the end of October, bringing a temporary end to any strident or over-confident behaviour and/or risk-taking. It could sadly, also lead to a draining of vigour or momentum from equity markets too – something to watch as we get closer to eclipse season. (You can find out more in my latest Financial Astrology Forecast.)
Pluto’s ingress into Aquarius
Interestingly, Pluto is coming to the end of its 14-year stay in Capricorn, which began in January 2008 – just in time for the global financial crisis – and it is due to ingress into Aquarius on 23 March 2023, at which point, it’s laser sharp focus may turn towards the issue of social control and/or engineering via technology as well as surveillance culture.
For now, though, we may well find that Pluto forces us to implement the societal reforms needed to counter some of the negative effects of patriarchy, corruption and/or systemic abuse that have been brought to light during this period as a result of tyranny, fascism, extremism and our addiction to status, wealth and fossil fuels.
Many believe it will lead to a shake-up of the current world order, not just in terms of politics, but also with regards to the financial pyramid scheme of exploitation that has benefitted the few and kept the many in chains of debt and economic servitude.
More importantly, though, if Shoshanna Zuboff is right, then we will also have to contend with the utopian vision of what social media and smart technologies like it were supposed to do vs. what they’ve actually ended up becoming, and how these two things – the business model of what she has termed ‘surveillance capitalism’ and social values like democracy, free speech or the sharing of wealth and power along meritocratic lines – are, in many ways, diametrically opposed.
Solar Eclipse in Scorpio: Last hurrah for the Plutocracy?
However, before then, I think we can expect a last stand from the plutocracy, possibly in the form of war. Certainly, the signature of 6 South Saros series, of which the coming solar eclipse forms part, does point power grabs, hostile take-overs etc by those trying to maintain their control, which doesn’t bode well in terms of the Russia-Ukraine conflict (Pluto, along with Uranus, also rules nuclear weapons and technology).
If we count lunar eclipses from the Van Den Berg 124 saros cycle, then we are looking at eclipses that recurred in 1914 and 1945, close to both world wars, so not a cosmic picnic by any means! But, as the oroboros reminds us, the circle of life means that all death and destruction is the doorway to rebirth, and sometimes you have to break down to break through. Let’s try and keep things positive for now, shall we?
Big Bang or whimper?
And what of the UK economy? Sadly, as I have discussed elsewhere, I think Mervyn King is right – Britain (and indeed, the world) is headed for a deep and difficult recession that could see market values drop by as much as 60-80 percent. If we look at January 2022 stock market prices, you could argue we are already someway there, in which case, we could be halfway through the nightmare that began on 24 February when Putin invaded Ukraine.
However, if indicators like Gann cycles and Elliott Wave Theory are anything to go by, the outlook could remain bleak for some months or even years to come. Much will depend on geopolitical factors, as well as how quickly the global financial system takes to recover from inflation and currency devaluation created by 2020’s QE programme.
Some would argue that the system needs to break in order for things to improve. That’s certainly what defi proponents and groups like Occupy suggest. Even Lord King has indicated that he believes a deep recession is sometimes needed to reset the economy. One thing is for sure: we do seem to be on the precipice of a new era, for good or for bad – whether it ends in a fairer, more utopian world or ecological disaster or a nuclear war remains to be seen.
For now, though, let’s hope Truss et al swallow their strident and stubborn declarations to ‘stay the course’, take a leaf out of Marlowe’s playbook in Heart of Darkness and step back from the precipice:
“True, he had made that last stride, he had stepped over the edge, while I had been permitted to draw back my hesitating foot. And perhaps in this is the whole difference; perhaps all the wisdom, and all truth, and all sincerity, are just compressed into that inappreciable moment of time in which we step over the threshold of the invisible.”Heart of Darkness, Joseph Conrad
As a few wisened Tory seniors have warned in recent days: madness may be the wisdom of the brave, but fools can also rush in where angels fear to tread. The key to knowing the difference may come with age and experience, or via a mutinee by back-benchers. What comes next on that front – markets settling, a recall of parliament, a resignation or a vote of no confidence, is pure speculation and probably best left to political pundits, or perhaps another blog post.
We live in interesting times…
1 thought on “Humpty Dumpty: Will the UK economy recover?”
[…] the wake of the pound crash caused by Kwasi Kwarteng’s disastrous ‘mini-budget,’ the Liz Truss government has […]