Bank of England: Trussonomics could be costly for investors

The Old Lady is in a sticky spot. Inflation is at a 40-year high and an early 1990s-style recession looms. The UK has a tight labour market, like the US, and an energy shock, like the eurozone. Finding an escape route may be further complicated by the unorthodox economic policies of Liz Truss, the candidate likely to become the next prime minister.

Tax cuts are set to be an important feature of the Truss premiership. That, as her rival…