As mortgage rates rise and the cost of living crisis deepens in the aftermath of Kwasi Kwarteng’s mini-budget, some politicians and their friends in the City continue to ride high above the economic storm – and even profit from it.

One investor who is making millions out of the financial crisis is the new chancellor’s former employer: high-profile hedge fund manager Crispin Odey.

Odey’s fund has been betting that the cost of government debt would increase, and that’s precisely what’s been happening – particularly since the controversial mini-budget last Friday.

But even before the chancellor’s announcements sent UK government bonds into a tailspin, Reuters had reported that Odey Asset Management was up 145% in 2022, thanks to its bet against bonds.

Friday’s unfunded tax cuts sent the cost of government borrowing soaring as investors in government debt demanded a higher rate of return on their money due to concerns over the rising risk of lending to the government.

It’s not clear exactly how much Odey’s fund has made betting against government bonds (also known as gilts), but the fund’s performance does appear to have picked up in recent weeks, just as things have been getting worse in the economy.

In the aftermath of Friday, the yield – the rate the government needs to pay investors to borrow their money – on government ten-year bonds moved from around 3% to more than 4% in just four days. The increase in yields during September is one of the largest monthly rises on record. Yields at the start of the year were closer to 1%.

Before entering politics, chancellor Kwasi Kwarteng worked for Odey Asset Management as an analyst. He was elected MP for Spelthorne, Surrey in 2010. The following year, he received £10,000 for six months of consultancy work, while an MP, on behalf of his former employer.

While most funds make money when their investments rise in value, Odey – who is also a long-term donor to the Tory party – is a self-declared ‘contrarian’ who bets against the value of certain assets.

UK government bonds are one key ‘asset class’ that he has successfully bet against before.

Following the Brexit referendum, he made £220m overnight because the unexpected win for the Leave vote – much like Friday’s mini-budget – sent the pound plummeting and the interest rate on government bonds soaring.

Odey was a prominent backer of Brexit, donating hundreds of thousands of pounds to Leave-supporting organisations and causes during the referendum campaign.

Speaking to a BBC documentary crew the day after the referendum result was declared, the clearly elated Odey quoted an Italian proverb: “The morning has gold in its mouth.”

Odey declined to speak to openDemocracy, but has described his bets against government bonds as “the gifts that keep on giving” in an interview with the Financial Times.

Meanwhile, the newly installed business secretary, Jacob Rees-Mogg, is in line for a multi-million payout with the sale of a fund he helped set up, Somerset Capital Management – even though the fund is now valued at a fraction of the £90m offered three years ago.

Rees-Mogg left the business in 2019, but remains an owner. The sale is reportedly being prompted by the departure of another founder, Dominic Johnson, a former vice-chair of the Conservative Party.