A baptism by fire

So Liz Truss plunges deeper into her ideological experiment with the UK economy.The prime minister has knocked more than $500 billion off th [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( So Liz Truss plunges deeper into her ideological experiment with the UK economy. The prime minister has knocked more than $500 billion off the value of UK assets since her finance minister announced 161 billion pounds ($172 billion) of unfunded tax cuts last week. And the bond market crash that triggered is set to ramp up mortgage rates for millions of borrowers. Key reading: - [IMF Tells UK to ‘Re-Evaluate’ Tax Cut as Global Criticism Mounts]( - [Moody’s Warns Large Unfunded UK Tax Cuts Threaten Credit Rating]( - [UK Markets Have Lost $500 Billion Since Truss Took Over]( - [BOE Needs 100bps Rate Hike on UK’s ‘Big Gamble,’ El-Erian Says]( - [German Finance Minister Wary of the UK’s Fiscal ‘Experiment’]( The International Monetary Fund, in a highly unusual criticism of a Group of Seven government, urged Truss to reverse course, joining a torrent of criticism from the economics profession (which Truss herself has publicly derided). There seems little prospect of a U-turn. The massive fiscal giveaway is the centerpiece of Truss’s entire project, a policy she spent weeks defending during the summer campaign for the Conservative Party leadership. More likely would be a politically damaging round of spending cuts. Remember also the famous stubbornness of her hero, Margaret Thatcher. “You turn if you want to,” Thatcher told the Tory party conference in 1980, as her reforms drove up unemployment at the outset of her time in office. “The lady’s not for turning.” Truss will make her maiden speech as prime minister at her party’s conference next week, and that will be another crucial test of her support. The opposition Labour Party has surged to a record 17-point poll lead, according to YouGov. The Tory membership will probably be the last group to lose faith in her heady cocktail of Thatcherism redux. But even the party faithful may be unsettled by the free market’s verdict on her offensive. — [Ben Sills]( A pedestrian passes a closed shop in London on Monday. Photographer: Jason Alden/Bloomberg Click [here]( to sign up for our Equality Newsletter running tomorrow, and if you’re enjoying this newsletter, click [here]( to sign up for Balance of Power. Global Headlines Raising stakes | Russia prepared to annex a large chunk of Ukrainian territory after [declaring]( landslide victories in sham “referendums” it held in occupied regions. Gas prices [surged]( after state-run Gazprom warned it may halt supplies to western Europe via Ukraine. That came after reports that sabotage was suspected in huge leaks discovered in currently idled Nord Stream pipelines from Russia under the Baltic Sea. - The 700-meter wide pool of [bubbling water]( in the Baltic Sea caused by the rupture of the gas pipelines points to a climate disaster. - The growing [exodus]( of Russians fleeing President Vladimir Putin’s mobilization order is creating turmoil at the borders with neighboring states and stirring fears about potential instability. - Follow our rolling coverage of the war in Ukraine [here](. Gas leaks from a damaged Nord Stream pipeline in the Baltic Sea on Tuesday. Source: Norwegian Armed Forces Fighting hunger | President Joe Biden’s administration says it has secured more than $8 billion in private and public sector commitments to help [combat hunger]( ahead of a high-profile White House event to address the issue today. Food insecurity has been spreading among Americans with low-paying jobs, a situation that could worsen as the US Federal Reserve raises interest rates and the economy slows. - Senate Republican leader Mitch McConnell is backing a bipartisan bill that would raise the bar for [challenging]( presidential election results, boosting chances it will clear Congress this year. As China focuses on developing cutting-edge technology that can supply the rest of the world in a slew of burgeoning industries, from electric vehicles to bio-pharmaceuticals and artificial intelligence, it is facing [a problem](: a lack of skilled workers. Gender debate | After a video of a man [beating]( his wife on a Kuwait sidewalk spread on social media this month, the outcry was swift. Anger grew once local news outlets reported the reason: the woman had taken a job without her husband’s permission. Attacks, some fatal, against women are focusing attention on gender-based violence, political representation and economic rights ahead of National Assembly elections tomorrow. - Iran arrested the [daughter]( of a former president for “inciting rioters” in Tehran last night, the latest indication of high-profile support for protests roiling the Islamic Republic. Best of Bloomberg Opinion - [Russian Draft Dodgers Are Europe’s New Refugees: Andreas Kluth]( - [Iran’s Protesters Need Some More Homegrown Support: Bobby Ghosh]( - [China Is Using Military Microaggressions on Taiwan: Hal Brands]( Pacific setback | The US drive to reassert itself in the Pacific [suffered a blow](, with the Solomon Islands refusing to agree to a regional deal that was due to be signed at a high-level meeting in Washington within days. The island nation sent a diplomatic note to its regional partners saying it would not sign the declaration, the Australian Broadcasting Corporation reported. Explainers you can use - [How Climate, ‘Rapid Intensification’ Revved Up Ian]( - [All About Saudi Arabia’s Controversial Crown Prince]( - [What to Know About Bolsonaro-Lula Showdown in Brazil]( Quietly rich | The ostentatious [displays of wealth]( that marked the later years of Jose Eduardo dos Santos’s almost four-decade rule in Angola, one of the world’s most unequal nations, have become noticeably less prevalent. President Joao Lourenco unleashed an anti-corruption drive in 2017 that targeted several members of his predecessor’s inner circle. As [Henrique Almeida]( and [Candido Mendes]( report, many of the well-heeled now try to hide their wealth or pretend they were never really that rich after all. Tune in at 8am ET for our weekly Twitter Space with reporters in London and Rome to discuss the UK party conferences and market meltdown after the government announced tax cuts and massive spending, as well as the aftermath of the Italian election. You can listen via [this link](, which will also be available afterward. News to Note - The European Union is considering a German proposal to ban EU nationals from holding [high-paying]( roles in Russian state-owned companies, sources said. - Saudi Arabia’s 86-year-old king appointed his son, Crown Prince Mohammed bin Salman, to replace him as prime minister, continuing a gradual [transfer of power]( in the world’s largest oil exporter. - Afghanistan’s ruling Taliban have signed an [agreement]( with Russia to import fuel and wheat at a discount as the country struggles to feed its population and seeks to boost regional trade a year after regaining power. - Vice President Kamala Harris said the Biden administration intends to deepen America’s unofficial [ties with Taiwan](, a fresh warning to China. - North Korea fired a ballistic missile off its eastern coast today, South Korea’s Joint Chiefs of Staff said in a statement, a day before Harris was [set to visit]( the demilitarized zone dividing the nations. And finally ... At a bustling little outpost along the Dominican Republic’s border with Haiti, an imposing 13-foot-tall wall is being built out of concrete and steel. It will stretch some 102 miles (164 kilometers), blanketing all but the most inhospitable parts of the frontier, with the goal of [stopping the flow]( of Haitians fleeing the poorest country in the Americas. [Jim Wyss]( reports on how the town of Dajabón is a flash point of the immigration debate that’s raging across the globe. Workers build a border wall to stop the flow of migrants fleeing Haiti. Photographer: Tatiana Fernandez Geara Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022