British pound rises as finance minister brings forward policy announcements

Jeremy Hunt arrives at his home in London after being appointed Chancellor of the Exchequer following the resignation of Kwasi Kwarteng. Date taken: Friday, October 14, 2022.

Aaron Chown | Picture Pa | beautiful pictures

LONDON – Sterling against dollar on Monday morning after the UK’s new Finance Secretary Jeremy Hunt announced that he would implement parts of his medium-term fiscal plan at the end of the session.

The British pound rose nearly 1% to $1.1288 early Monday morning, extending gains following a statement from the UK Treasury.

The decision follows a dramatic day in British politics on Friday, which included a major financial shift from Prime Minister Liz Truss and the sacking of Finance Minister Kwasi Kwarteng. He was quickly replaced by Hunt, who is expected to make a statement at 11 a.m. local time on Monday.

Monday’s announcements will arrive two weeks ahead of schedule. However, the full medium-term financial plan is still set to be released on October 31, accompanied by a forecast from the Independent Office for Budget Responsibility – something that was missing from the original small budget. announced on September 23. bond market.

Mr Hunt said late last week that his priority as Treasury Secretary was growth, like his predecessor, but he insisted it would be “underpinned by stability.”

“The drive to grow the economy is right – it means more people can get good jobs, new businesses can thrive and we can ensure world-class public services. But we’ve gone too far, too quickly,” Hunt said in a statement on Saturday.

Biden: The original plan was ‘a mistake’

International Monetary Fund issue a damning ruling on debt financing tax cuts after they were first announced at the end of September. UK chainsaw bond Strong sell-off and sterling hit a record low in the days that followed.

In a rare statement, the IMF said the plans put forward by the UK would “potentially increase inequality” and stressed that it “does not recommend large and untargeted fiscal packages”. this moment.”

US President Joe Biden over the weekend weighed in on the UK economy, describing Truss’ now-abandoned tax cut plan as a “mistake” and expressing concern that the monetary policy of countries around the world would be a “mistake”. other countries could harm the United States.

“I’m not the only one who thinks it was a mistake,” Biden said. “I don’t agree with this policy, but that’s up to the UK.”

Biden also said it was “predictable” that Truss would have to backtrack on the plans. He spoke to reporters at an ice cream parlor in Oregon on Saturday.

British Prime Minister Liz Truss sacks her finance minister amid growing political pressure and market turmoil

Pressure on the truss

On Friday, Truss announced partially reverse her so-called small budget, including the cancellation of a pledge to reverse a corporate tax increase. The company tax will now increase from 19% to 25% as originally planned by her predecessor Boris Johnson’s government.

“It’s clear that part of our small budget has gone further and faster than the market expected,” Truss said in a brief and hastily arranged news conference on Friday.

Market though not reassured by this move, and the pound fell about 1.1% against the dollar following Truss’ speech, trading at around $1.1205. Many political observers highlighted her poor performance on Friday, adding to pressure on Truss as some lawmakers called for her to step down.


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