THE GUARDIAN: Prime minister and Chris Philp fail to restore investor confidence in series of interviews, as government bond yields rise and stock markets tumble
The prime minister, Liz Truss, and the Treasury’s no 2, Chris Philp, have both done a round of broadcast interviews this morning – but their comments appear to have done little to reassure markets.
Government bond yields are rising again, the stock market has tumbled and the pound is sliding. Sterling is now worth $1.0789, a 0.9% drop on the day.
The FTSE 100 and FTSE 250 indices have lost 1.8% and 2.3% respectively this morning. Germany’s Dax has dropped 1.9%, France’s CAC has slid 1.8% and Italy’s FTSE MiB fell 1.1%.
Despite a barrage of criticism, from the International Monetary Trust and the former Bank of England governor Mark Carney, the government is refusing to perform a U-turn on the package of £45bn of unfunded tax cuts aimed at the wealthy it announced on Friday. There is also no sign at the moment that the fiscal policy statement planned for 23 November could be brought forward.
Truss said this morning: “I have to do what I believe is right for the country and what is going to help move our country forward.” » | Julia Kollewe | Thursday, September 29, 2022
Showing posts with label pound sterling crisis. Show all posts
Showing posts with label pound sterling crisis. Show all posts
Thursday, September 29, 2022
Market-turmoil and Slumping British Pound after UK Government Announced Economic Plans | DW News
Tuesday, September 27, 2022
UK Warned ‘Utterly Irresponsible’ Policy Could Drive Pound below Dollar and Euro Parity - Business Live
THE GUARDIAN: Former US Treasury secretary Larry Summers warns the first step in regaining credibility is not saying incredible things
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Larry Summers, a former US Treasury secretary, has warned that the UK government’s ‘utterly irresponsible’ plans could drag the pound below parity against the euro, as well as the dollar.
Summers has heavily criticised chancellor Kwasi Kwarteng for undermining credibility by saying ‘incredible things’ about planning more tax cuts -- those weekend comments pushed the pound to a record low of $1.0327 on Monday.
Summers says he was “very pessimistic about the consequences of utterly irresponsible UK policy on Friday,” but didn’t expect the markets to get so bad so quickly.
Summers also suggests the Bank of England should have taken more decisive action, rather than its ‘timid’ statement yesterday. » | Graeme Wearden | Tuesday, September 27, 2022
Pound comes under new pressure after Bank of England fails to raise rates: Central bank stops short of emergency rate hike and instead says it will make full assessment in November »
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Larry Summers, a former US Treasury secretary, has warned that the UK government’s ‘utterly irresponsible’ plans could drag the pound below parity against the euro, as well as the dollar.
Summers has heavily criticised chancellor Kwasi Kwarteng for undermining credibility by saying ‘incredible things’ about planning more tax cuts -- those weekend comments pushed the pound to a record low of $1.0327 on Monday.
Summers says he was “very pessimistic about the consequences of utterly irresponsible UK policy on Friday,” but didn’t expect the markets to get so bad so quickly.
Summers also suggests the Bank of England should have taken more decisive action, rather than its ‘timid’ statement yesterday. » | Graeme Wearden | Tuesday, September 27, 2022
Pound comes under new pressure after Bank of England fails to raise rates: Central bank stops short of emergency rate hike and instead says it will make full assessment in November »
Pound Crashes to All-time Low as UK Chancellor Hints at More Tax Cuts
Chancellor Kwasi Kwarteng was today forced to quell growing market unease over his low-tax, high borrowing strategy with a promise to set out more details in November, along with independent costings.
The Bank of England put out a statement too, saying they wouldn't hesitate to hike interest rates at their next meeting, but neither intervention seemed to reassure city markets.
The pound slid once again this evening, having hit a historic low against the dollar earlier in a rollercoaster day.
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And amidst the turmoil - the cost of government borrowing shot up too.
The Bank of England put out a statement too, saying they wouldn't hesitate to hike interest rates at their next meeting, but neither intervention seemed to reassure city markets.
The pound slid once again this evening, having hit a historic low against the dollar earlier in a rollercoaster day.
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And amidst the turmoil - the cost of government borrowing shot up too.
Monday, September 26, 2022
Pound Comes under New Pressure after Bank of England Fails to Raise Rates
THE GUARDIAN: Central bank stops short of emergency rate hike and instead says it will make full assessment in November
The Bank of England issued a statement in response the pound’s sharp fall on currency markets.Photograph: James Veysey/Rex/Shutterstock
The government was struggling to prevent a full-scale loss of financial market confidence in its economic strategy on Monday evening after the Bank of England’s decision to rule out an emergency rise in interest rates prompted fresh selling of the pound.
Attempts by Threadneedle Street and the Treasury failed to repair the damage caused by Kwasi Kwarteng’s mini-budget last Friday, with sterling falling to a record low against the US dollar.
Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight. » | Larry Elliott, Economics editor and Rowena Mason, Deputy political editor | Monday, September 26, 2022
Markets warn sterling slump could lead UK interest rates to triple by next year: Analysts expect Bank of England to convene meeting to raise rates with further increase in November »
Isn’t this Governor being rather lily-livered? – © Mark Alexander
The government was struggling to prevent a full-scale loss of financial market confidence in its economic strategy on Monday evening after the Bank of England’s decision to rule out an emergency rise in interest rates prompted fresh selling of the pound.
Attempts by Threadneedle Street and the Treasury failed to repair the damage caused by Kwasi Kwarteng’s mini-budget last Friday, with sterling falling to a record low against the US dollar.
Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight. » | Larry Elliott, Economics editor and Rowena Mason, Deputy political editor | Monday, September 26, 2022
Markets warn sterling slump could lead UK interest rates to triple by next year: Analysts expect Bank of England to convene meeting to raise rates with further increase in November »
Isn’t this Governor being rather lily-livered? – © Mark Alexander
British Pound Touches Record Low as Investors Dump U.K. Assets
THE NEW YORK TIMES: The market’s resounding rejection of the new British government’s plans for tax cuts and borrowing continued Monday as the pound briefly fell to its weakest level against the U.S. dollar on record.
After a historically bad day on Friday, the British currency plunged as low as $1.035 in the early hours of Monday morning, before recovering to about $1.08, down 0.5 percent for the day. It also weakened slightly against the euro.
On Monday, prices for British government bonds plummeted, and yields surged, sending borrowing costs to new highs. The 10-year yield, which influences mortgages, business loans and other types of debt, hit its highest level in more than a decade. It traded at around 4.15 percent on Monday, double where it was a month and a half ago.
As traders dumped British assets, analysts have said the government’s plan to quickly grow the economy through deregulation and tax cuts, which will require tens of billions of pounds in additional borrowing at a time of rising interest rates and high inflation, was a gamble. » | Eshe Nelson | Monday, September 26, 2022
Clearly, Kwarteng’s voodoo economics has failed to impress the markets! – © Mark Alexander
After a historically bad day on Friday, the British currency plunged as low as $1.035 in the early hours of Monday morning, before recovering to about $1.08, down 0.5 percent for the day. It also weakened slightly against the euro.
On Monday, prices for British government bonds plummeted, and yields surged, sending borrowing costs to new highs. The 10-year yield, which influences mortgages, business loans and other types of debt, hit its highest level in more than a decade. It traded at around 4.15 percent on Monday, double where it was a month and a half ago.
As traders dumped British assets, analysts have said the government’s plan to quickly grow the economy through deregulation and tax cuts, which will require tens of billions of pounds in additional borrowing at a time of rising interest rates and high inflation, was a gamble. » | Eshe Nelson | Monday, September 26, 2022
Clearly, Kwarteng’s voodoo economics has failed to impress the markets! – © Mark Alexander
Pound’s Plummet Underlines Schoolboy Error by Kwasi Kwarteng
THE GUARDIAN: Chancellor added to market worries by pledging further tax cuts in full budget planned for later this year
Kwasi Kwarteng’s inexperience has been exposed. Photograph: Jeff Overs/BBC/PA
The savage sell-off in the pound in east Asia overnight was further evidence – should any be needed – that confidence in the new Liz Truss government is rapidly draining away.
Sterling fell to its lowest level against the dollar, and despite an attempt at a rally in early London trading, the likelihood is that parity against the dollar will be tested before long. September tends to be the month for a sterling crisis – and so it has proved again.
Part of the story of the pound’s weakness is a function of dollar strength but that does not explain why sterling has fallen so rapidly since the end of last week. There are three UK-related factors behind the fall.
First, once a currency hits the skids it is hard to stop it. Momentum trading took over in the aftermath of Kwasi Kwarteng’s mini-budget and it has proved hard to halt.
Second, Kwarteng committed a schoolboy error by pledging further tax cuts in a full budget planned for later this year. If the markets are worried about the state of the government’s finances and the increase in borrowing needed to fund your plans, it is not the wisest course of action to add to those concerns. Kwarteng’s inexperience has been exposed. Third,... » | Larry Elliott, Economics editor | Monday, September 26, 2022
The savage sell-off in the pound in east Asia overnight was further evidence – should any be needed – that confidence in the new Liz Truss government is rapidly draining away.
Sterling fell to its lowest level against the dollar, and despite an attempt at a rally in early London trading, the likelihood is that parity against the dollar will be tested before long. September tends to be the month for a sterling crisis – and so it has proved again.
Part of the story of the pound’s weakness is a function of dollar strength but that does not explain why sterling has fallen so rapidly since the end of last week. There are three UK-related factors behind the fall.
First, once a currency hits the skids it is hard to stop it. Momentum trading took over in the aftermath of Kwasi Kwarteng’s mini-budget and it has proved hard to halt.
Second, Kwarteng committed a schoolboy error by pledging further tax cuts in a full budget planned for later this year. If the markets are worried about the state of the government’s finances and the increase in borrowing needed to fund your plans, it is not the wisest course of action to add to those concerns. Kwarteng’s inexperience has been exposed. Third,... » | Larry Elliott, Economics editor | Monday, September 26, 2022
UK Bonds Slump after Pound Plunges to Record Low against Dollar – Business Live
THE GUARDIAN: Economists suggest Bank of England may need an emergency interest rate hike, as gilts slide and sterling slumps to a record low against the US dollar
Speculation of an emergency Bank of England rate hike is giving the pound some support, agrees Matthew Ryan, head of market strategy at global financial services firm Ebury » | Graeme Wearden | Monday, September 26, 2022
Pound hits all-time low against dollar after mini-budget rocks markets: Odds of sterling hitting parity with dollar jump, as analysts say UK bond market ‘getting smoked’ by giveaway »
Speculation of an emergency Bank of England rate hike is giving the pound some support, agrees Matthew Ryan, head of market strategy at global financial services firm Ebury » | Graeme Wearden | Monday, September 26, 2022
Pound hits all-time low against dollar after mini-budget rocks markets: Odds of sterling hitting parity with dollar jump, as analysts say UK bond market ‘getting smoked’ by giveaway »
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