The British pound is caught in a doom loop

Plus: Alzheimer's breakthrough. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a Turkish central bank of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Just when [the BOE thought it was out](, Liz Truss pulled it back in. - A [new Alzheimer’s drug]( could be a real-ish deal. - Don’t turn away [Russian refugees](. - [Peak oil]( is here at last. Truss Fall For years, the heavyweight champion of Central Bank Clownery has been the Central Bank of the Republic of Turkey. It operates at the whim of strongman Recep Tayyip Erdogan, who has this novel economic theory that slashing interest rates fights inflation. It’s a bold strategy, [Cotton](. It’s not paying off for them. The bank [slashed]( rates last week with inflation running at 80%. That’s eight-zero percent. The Bank of England really doesn’t deserve to be mentioned in the same breath. But it has been dragged by Fiscal Policy Clownery into behaving a bit like its Turkish counterpart. Investors are rejecting Liz Truss’s “What is this ‘fiscal responsibility’ of which you speak?” budget plan so hard that the BOE had to intervene this morning to [avoid a collapse of the market for UK government bonds](, Mark Gilbert notes. It did so by buying up those bonds — an action often described in other contexts as “QE.” Inflation is not quite 80% in the UK, but it is in double digits, a problem the BOE was trying to address by tightening monetary policy, up until this morning, when it resumed doing the opposite of that. The British economy went from a would-be libertarian utopia to an [MMT]( experiment overnight. Intervention was necessary to avert marketpocalypse, but it will force the BOE to crush economic growth even more aggressively in the future, Mark writes. Because inflation pressures are only intensifying as the pound sheds value like my terrible Twitter account loses followers. That raises the cost of imported supplies, which consumer-goods makers [will have to pass on to customers](, writes Andrea Felsted. Financial analysts still think UK banks will come through the nightmare OK, with the help of hefty interest rates. Investors think otherwise, and Paul Davies agrees with them. [High interest rates are no help for lenders]( when growth is such a dumpster fire that nobody wants to borrow. And unless the BOE plans to go full Turkey, that day is coming. Miracle-Ish Drug Alzheimer’s has such a long history of frustrating efforts to understand it, much less defeat it, that it’s understandable to doubt reports a drug might actually help fight it. That’s even more the case when the drugmakers involved are Biogen and Eisai, whose Aduhelm treatment has been longer on hype than on results. But Lisa Jarvis writes their new drug, [lecanemab, may be the real deal](. They reported it significantly helped slow cognitive decline in patients. We’ll still need to comb through the data when we get it, looking for flaws. But if the effects are real, then Lisa writes it could open up new avenues of research and new, legitimate reasons for hope.  Bonus Miracle-Ish Drug Reading: Here’s [who should get the new Covid booster](, and when. — Faye Flam From Russia, With Panic Russia may stink at fighting wars, but it is very good at creating refugees. Its invasion of Ukraine sent millions of Ukrainians running to other parts of Europe for safety. Now its failure to beat the Ukrainians who stayed behind has forced it to drag other Russians into the fight. And that has caused many of those Russians to join the Ukrainians running to Europe for safety. As Andreas Kluth notes, Europe had no problem welcoming the Ukrainian refugees. The Russian ones are harder to stomach, understandably. But Andreas writes [the West should welcome Russia’s draft dodgers and other dissidents](. Will some be double agents? Maybe. But the vast majority will probably be valuable members of Western society, thus depriving Vladimir Putin of the same. Bonus Russia Reading: If Russia sabotaged Nord Stream, it also [sabotaged its rep as a reliable energy source]( for China. — Clara Ferreira Marques Telltale Charts The world was very close to [peak oil demand before the Ukraine war]( happened and central bankers started trying to murder the global economy, David Fickling writes. The way things are going, we might be passing over the peak right now. Once we worried the Fed had waited too long to fight inflation. Now we have to worry it’s [fighting inflation too aggressively](, John Authers warns. Further Reading President Joe Biden’s plan to let [more people cap student-loan payments]( is unfair and will raise college costs. — Bloomberg’s editorial board It turns out the [$100 million deli]( may have been a fraud. — Matt Levine The credit lines private equity firms [use to juice returns are drying up](. — Shuli Ren When will bankers learn [not to use private messaging apps](? — Paul Davies The [support Iran’s protesters need most]( has to come from home. — Bobby Ghosh Jair [Bolsonaro may not want to leave]( when he loses Brazil’s election. — Clara Ferreira Marques Hurricane Ian is an example of how Americans keep [moving right into the teeth of climate risk](. — Mark Gongloff ICYMI Hurricane [Ian made landfall]( as a monster storm. Germany and the US are in no hurry to [give Ukraine fancy tanks](. There’s got to be [a better way to buy Series I bonds](! (There is.) Workers who get [four-day weeks sleep more](. Kickers Scientists use [micro-robots to deliver antibiotics]( to lungs. People used to [fear the push button](. We [don’t maintain things]( anymore. Some [infinities are bigger]( than others. Notes:  Please send micro-robots and feedback to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022