Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

UK market meltdown? Nothing to see here, Treasury minister says

Economy Sep 24, 2022 09:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: British Prime Minister Liz Truss (not pictured) and Chancellor of the Exchequer Kwasi Kwarteng visit Berkeley Modular, in Northfleet, Kent, Britain, September 23, 2022. REUTERS/Dylan Martinez/Pool 2/2

LONDON (Reuters) - Britain's deputy finance minister on Saturday played down a historic collapse in the pound and government bonds in response to the country's new economic growth plan, which sent international investors heading for the exit.

The pound slumped 3.6% on Friday below $1.09, a new 37-year low against the dollar, while gilts suffered their worst day in decades as the market digested finance minister Kwasi Kwarteng's announcement of a borrowing-funded drive for growth.

"Let's be clear, the interest rates payable on government gilts is about the same in the United Kingdom now today as it is in the United States," Chris Philp, Britain's deputy finance minister, told Sky News when asked about the market moves.

"You mention the dollar, that's been strong against a number of currencies, including the yen and the euro."

The pound has fallen more than 11% against the dollar over the last three months, making it the worst-performing major currency recently. It fell to its lowest since January 2021 against the euro on Friday.

Kwarteng scrapped the country's top rate of income tax and cancelled a planned rise in corporate taxes - all on top of a hugely expensive plan to subsidise energy bills for households and businesses.

The Resolution Foundation think tank, which focuses on living standards, said the plans pointed to an extra 400 billion pounds of borrowing over the next five years.

"(The reason) we're doing this isn't for intraday moves in the currency market, Philp said.

UK market meltdown? Nothing to see here, Treasury minister says
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email