Sunak said in a speech on Wednesday in London that he would push back by five years to 2035 a plan to bar the sale of new petrol and diesel cars, casting the decision as an effort to protect families struggling with bills. The vast majority of vehicles sold in the UK would likely be electric by 2030 without government intervention, he said.

“At least for now it should be you, the consumer, who makes that choice, not the government forcing you to do it,” Sunak said in Downing Street. 

While Sunak insisted he was still committed to reaching net zero by 2050 and not watering down any targets, he said the UK must act in a “more proportionate way.” He affirmed his belief that climate change was “real and happening,” but said that the debate over the issue had been “charged with far too much emotion and not enough clarity.” 

Eoin Treacy's view

Is common sense breaking out in the UK, or is this policy reversal a calculated play for the electorate’s unspoken middle ground? Perhaps it is both. The harsh reality for consumers is the efforts to achieve zero emissions are more expensive and wages are not rising quick enough to compensate the majority.

Everyone wants to breath clean air and drink clean water. At the same time everyone wants to enjoy creature comforts without worrying about day to day expenses. A rational discussion about how much of a drop in living standards net zero requires and whether that can be eased by deploying non-consensus solutions like generation IV nuclear is overdue.
The bond market is voting with its feet. Gilt yields have the clearest evidence of peaking among any of the major economies.

The FTSE-100 (P/E 10, DY 3.89%) continues to firm from the region of the trend mean and hit a new recovery high today.