Mark Carney says Truss made Britain “like Argentina” as City supports Labour

Investors are backing Labour to undermine Rishi Sunak’s efforts to restore the Conservative Party’s reputation as a party that is good with money.

 Two thirds of money manager and traders who said that a Labour led government or a Labour led coalition would be “the most market-friendly outcome” in the next general elections.

Most people who backed Sir Keir’s Starmer party cited as a reason to support his party. 80pc of 227 respondents said that the confidence in British assets has not fully recovered.

Mark Carney, the former governor of the Bank of England, accused Truss of transforming Britain into “Argentina by way of the Channel”.

He said, “When Brexiteers wanted to build Singapore on the Thames the Truss Government delivered Argentina on Channel, and that was over a year ago.

“Those who have little experience in private sector, lifelong politicians posing as free-marketeers, grossly underestimate the importance of institutions and discipline for a strong economy.”

Argentina is now synonymous with economic failure after a series of crises. It has defaulted on its international loans nine times.

Mr Carney said that “extreme Conservatives”, both in Britain and overseas, used tax and spending reductions as a Pavlovian response to every problem. This was “based on a fundamental misunderstanding of the forces driving economies”.

The Canadian stated: “Nothing – not even the far right populist politicians – can destroy our efforts faster than a fiscal crises, and the reaction of the markets to Truss’ budget highlighted the new, tough macroeconomic environment.

“Good money and credible policy will be rewarded. Mistakes will be punished.” “No government will be excluded.”

Mr Carney spoke at an event that Sir Keir attended, as well as former Labour leader Tony Blair, Canadian PM Justin Trudeau, and former New Zealand prime minister Jacinda Ardern.

Douglas McWilliams said that Mr Carney “tried to exonerate” the Bank of England, even though the Bank of England had been too slow in raising interest rates and “let the Pension Fund Liability Problem blow up which they had not disclosed to anyone”.

He said: “They have been trying to blame Liz Truss, Kwasi Kwarteng and themselves when they actually contributed to the issue.”

McWilliams called Mr Carney’s remarks “absolutely exceptional” for a civil servant.

Bloomberg’s survey indicates that City money managers are siding with Mr Carney. The majority of people are still skeptical about the Conservative Party’s economic record after the Truss Administration, despite former Banker Mr Sunak’s efforts to repair the party’s reputation.

During Ms Truss’s 49-day term as Prime Minister, borrowing costs increased after she pledged not to cut spending without cutting taxes and failed to publish Office for Budget Responsibility’s forecasts along with her mini-Budget.

The survey suggests that Sir Keir’s efforts to woo finance and business through the so-called “Prawn cocktail Offensive 2.0”, are also showing results.

Labour has promised to not introduce a wealth-tax or increase public spending in a large way, which has assured the City.