Historic pound sterling against the dollar as the UK currency loses more than 4% to a record 1.0327 against the US. Adding to last Friday’s 3.6% drop, Treasury Secretary Kwasi Kwarten unveiled a controversial tax cut plan for the wealthiest and raised the ceiling on bankers’ income bonuses.In fact, 3 The pound has fallen nearly 7% since conservative Liz Truss took over as prime minister from Boris Johnson a week ago.
Labor Department Chief Economist Rachel Reeves spoke of a “national emergency” and called Kwarteng and Truss “two desperate gamblers chasing losses in a casino”. It aims to get the economy out of double-digit inflation, freeze energy prices, cut taxes and deregulate the banking sector. The government also announced limits on the right to strike and increased public financing. Markets reacted to the announcement, which coincided with forecasts of a national recession, and government bonds plunged. In total, the plan will require a further £72bn of public financing over the next six months alone.
Record tax cuts for the richest and cut EU cap on bankers’ bonuses: this is how London fights the crisis
Even the authoritative economic weekly economist He pointed the finger at the London government. According to the newspaper, “The simplest explanation for the sale is that investors don’t believe the government’s tax cuts will lead to the real economic growth that Kwarten had hoped for.” Instead, banks are forecasting higher inflation.England will not fully compensate with rising interest rates.” It suggests that a combination of changes in GDP and the long-term implications of the decision to leave the European Union have led to a fundamental rethinking of the pound by investors.” do”.
Gilt prices also plummeted, pushing yields to their highest level in more than a decade amid speculation that the Bank of England may need to take emergency action after the pound hit an all-time low. It is night. Yields on two-year gold leaf climbed a whopping 54 basis points to reach 4.533%, the highest since September 2008.
All eyes are now on the Bank of England, who can step in to rectify the situation. “Further weakness in the pound in early trading has reached a point where the Bank of England must step in to regain control,” said Paul Dales, UK chief economist at London-based economic consultancy Capital Economics. It means that,” he said. According to Sky News, the institute’s statement on the market turmoil may be released “soon.” Money markets expect interest rates to rise by 1 point to 3.25% for him at the next BoE meeting, according to Reinitiv data.